Exhibit 4.1



                                                                EXECUTION COPY

==============================================================================




                                 CWABS, INC.,
                                   Depositor

                         COUNTRYWIDE HOME LOANS, INC.,
                                    Seller

                             COUNTRYWIDE LFT LLC,
                                    Seller

                     COUNTRYWIDE HOME LOANS SERVICING LP,
                                Master Servicer

                             THE BANK OF NEW YORK,
                                    Trustee

                                      and


                   THE BANK OF NEW YORK TRUST COMPANY, N.A.,
                                  Co-Trustee



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

                        POOLING AND SERVICING AGREEMENT

                         Dated as of November 1, 2004
                        ---------------------------------


                   ASSET-BACKED CERTIFICATES, SERIES 2004-12



<PAGE>


<TABLE>
<CAPTION>

                               Table of Contents

                                                                                          Page


                                      ARTICLE I.
                                      DEFINITIONS
<S>            <C>
Section 1.01   Defined Terms.................................................................9
Section 1.02   Certain Interpretive Provisions..............................................59

                                      ARTICLE II.
             CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

Section 2.01   Conveyance of Mortgage Loans.................................................59
Section 2.02   Acceptance by Trustee of the Mortgage Loans..................................64
Section 2.03   Representations, Warranties and Covenants of the Master Servicer and
               the Sellers..................................................................67
Section 2.04   Representations and Warranties of the Depositor..............................85
Section 2.05   Delivery of Opinion of Counsel in Connection with Substitutions and
               Repurchases..................................................................87
Section 2.06   Authentication and Delivery of Certificates..................................87
Section 2.07   Covenants of the Master Servicer.............................................88

                                     ARTICLE III.
                    ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 3.01   Master Servicer to Service Mortgage Loans....................................88
Section 3.02   Subservicing; Enforcement of the Obligations of Master Servicer..............90
Section 3.03   Rights of the Depositor, the Sellers, the Certificateholders, the NIM
               Insurer, the Class 1-AV-1 Insurer and the Trustee in Respect of the
               Master Servicer..............................................................90
Section 3.04   Trustee to Act as Master Servicer............................................91
Section 3.05   Collection of Mortgage Loan Payments; Certificate Account; Distribution
               Account; Seller Shortfall Interest Requirement...............................92
Section 3.06   Collection of Taxes, Assessments and Similar Items; Escrow Accounts..........95
Section 3.07   Access to Certain Documentation and Information Regarding the Mortgage
               Loans........................................................................95
Section 3.08   Permitted Withdrawals from the Certificate Account, Distribution
               Account, Carryover Reserve Fund and the Principal Reserve Fund...............96
Section 3.09   [Reserved]...................................................................99
Section 3.10   Maintenance of Hazard Insurance..............................................99
Section 3.11   Enforcement of Due-On-Sale Clauses; Assumption Agreements....................99
Section 3.12   Realization Upon Defaulted Mortgage Loans; Determination of Excess
               Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans..........101
Section 3.13   Co-Trustee to Cooperate; Release of Mortgage Files..........................104
</TABLE>


                                      i
<PAGE>

<TABLE>
<CAPTION>

<S>            <C>
Section 3.14   Documents, Records and Funds in Possession of Master Servicer to be
               Held for the Trustee........................................................105
Section 3.15   Servicing Compensation......................................................106
Section 3.16   Access to Certain Documentation.............................................106
Section 3.17   Annual Statement as to Compliance...........................................106
Section 3.18   Annual Independent Public Accountants' Servicing Statement; Financial
               Statements..................................................................107
Section 3.19   The Corridor Contracts......................................................107
Section 3.20   Prepayment Charges..........................................................108

                                      ARTICLE IV.
                   DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

Section 4.01   Advances; Remittance Reports................................................109
Section 4.02   Reduction of Servicing Compensation in Connection with Prepayment
               Interest Shortfalls.........................................................110
Section 4.03   [Reserved]..................................................................111
Section 4.04   Distributions...............................................................111
Section 4.05   Monthly Statements to Certificateholders....................................129
Section 4.06   Class 1-AV-1 Policy; Rights of the Class 1-AV-1 Insurer.....................132
Section 4.07   [Reserved]..................................................................135
Section 4.08   Carryover Reserve Fund......................................................135
Section 4.09   Credit Comeback Excess Account..............................................137

                                      ARTICLE V.
                                   THE CERTIFICATES

Section 5.01   The Certificates............................................................138
Section 5.02   Certificate Register; Registration of Transfer and Exchange of
               Certificates................................................................139
Section 5.03   Mutilated, Destroyed, Lost or Stolen Certificates...........................143
Section 5.04   Persons Deemed Owners.......................................................143
Section 5.05   Access to List of Certificateholders' Names and Addresses...................144
Section 5.06   Book-Entry Certificates.....................................................144
Section 5.07   Notices to Depository.......................................................145
Section 5.08   Definitive Certificates.....................................................145
Section 5.09   Maintenance of Office or Agency.............................................146

                                      ARTICLE VI.
                  THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS

Section 6.01   Respective Liabilities of the Depositor, the Master Servicer and the
               Sellers.....................................................................146
Section 6.02   Merger or Consolidation of the Depositor, the Master Servicer or the
               Sellers.....................................................................146
Section 6.03   Limitation on Liability of the Depositor, the Sellers, the Master
               Servicer, the NIM Insurer and Others........................................147
</TABLE>

                                      ii
<PAGE>

<TABLE>
<CAPTION>

<S>            <C>
Section 6.04   Limitation on Resignation of Master Servicer................................147
Section 6.05   Errors and Omissions Insurance; Fidelity Bonds..............................148

                                     ARTICLE VII.
                        DEFAULT; TERMINATION OF MASTER SERVICER

Section 7.01   Events of Default...........................................................148
Section 7.02   Trustee to Act; Appointment of Successor....................................150
Section 7.03   Notification to Certificateholders..........................................151

                                     ARTICLE VIII.
                       CONCERNING THE TRUSTEE AND THE CO-TRUSTEE

Section 8.01   Duties of Trustee...........................................................152
Section 8.02   Certain Matters Affecting the Trustee.......................................153
Section 8.03   Trustee Not Liable for Mortgage Loans.......................................154
Section 8.04   Trustee May Own Certificates................................................155
Section 8.05   Master Servicer to Pay Trustee's Fees and Expenses..........................155
Section 8.06   Eligibility Requirements for Trustee........................................155
Section 8.07   Resignation and Removal of Trustee..........................................156
Section 8.08   Successor Trustee...........................................................156
Section 8.09   Merger or Consolidation of Trustee..........................................157
Section 8.10   Appointment of Co-Trustee or Separate Trustee...............................157
Section 8.11   Tax Matters.................................................................158
Section 8.12   Co-Trustee..................................................................161
Section 8.13   Access to Records of the Trustee............................................164
Section 8.14   Suits for Enforcement.......................................................164

                                      ARTICLE IX.
                                      TERMINATION

Section 9.01   Termination upon Liquidation or Repurchase of all Mortgage Loans............165
Section 9.02   Final Distribution on the Certificates......................................165
Section 9.03   Additional Termination Requirements.........................................167

                                      ARTICLE X.
                               MISCELLANEOUS PROVISIONS

Section 10.01  Amendment...................................................................168
Section 10.02  Recordation of Agreement; Counterparts......................................170
Section 10.03  Governing Law...............................................................170
Section 10.04  Intention of Parties........................................................170
Section 10.05  Notices.....................................................................171
Section 10.06  Severability of Provisions..................................................172
Section 10.07  Assignment..................................................................172
Section 10.08  Limitation on Rights of Certificateholders..................................172
Section 10.09  Inspection and Audit Rights.................................................173
Section 10.10  Certificates Nonassessable and Fully Paid...................................173
</TABLE>

                                     iii
<PAGE>

<TABLE>
<CAPTION>

<S>            <C>
Section 10.11  Rights of NIM Insurer.......................................................173


Exhibits
--------

EXHIBIT A                    Forms of Certificates
    EXHIBIT A-1              Form of Class AF-1 Certificate
    EXHIBIT A-2              Form of Class AF-2 Certificate
    EXHIBIT A-3              Form of Class AF-3 Certificate
    EXHIBIT A-4              Form of Class AF-4 Certificate
    EXHIBIT A-5              Form of Class AF-5 Certificate
    EXHIBIT A-6              Form of Class AF-6 Certificate
    EXHIBIT A-7              Form of Class MF-1 Certificate
    EXHIBIT A-8              Form of Class MF-2 Certificate
    EXHIBIT A-9              Form of Class MF-3 Certificate
    EXHIBIT A-10             Form of Class MF-4 Certificate
    EXHIBIT A-11             Form of Class MF-5 Certificate
    EXHIBIT A-12             Form of Class MF-6 Certificate
    EXHIBIT A-13             Form of Class MF-7 Certificate
    EXHIBIT A-14             Form of Class BF Certificate
    EXHIBIT A-15             Form of Class 1-AV-1 Certificate
    EXHIBIT A-16             Form of Class 2-AV-1 Certificate
    EXHIBIT A-17             Form of Class 2-AV-2 Certificate
    EXHIBIT A-18             Form of Class 2-AV-3 Certificate
    EXHIBIT A-19             Form of Class MV-1 Certificate
    EXHIBIT A-20             Form of Class MV-2 Certificate
    EXHIBIT A-21             Form of Class MV-3 Certificate
    EXHIBIT A-22             Form of Class MV-4 Certificate
    EXHIBIT A-23             Form of Class MV-5 Certificate
    EXHIBIT A-24             Form of Class MV-6 Certificate
    EXHIBIT A-25             Form of Class MV-7 Certificate
    EXHIBIT A-26             Form of Class MV-8 Certificate
    EXHIBIT A-27             Form of Class BV Certificate
EXHIBIT B                    Forms of Class P Certificates
    EXHIBIT B-1              Form of Class PF Certificate
    EXHIBIT B-2              Form of Class PV Certificate
EXHIBIT C                    Forms of Class C Certificates
    EXHIBIT C-1              Form of Class CF Certificate
    EXHIBIT C-2              Form of Class CV Certificate
EXHIBIT D                    Form of Class A-R Certificate
EXHIBIT E                    Form of Tax Matters Person Certificate (Class A-R)
EXHIBIT F                    Mortgage Loan Schedule
    EXHIBIT F-1              List of Mortgage Loans
    EXHIBIT F-2              Mortgage Loans for which All or a Portion of a Related Mortgage
                                 File is not Delivered to the Trustee on or prior to the Closing
                                 Date
</TABLE>

                                      iv
<PAGE>

<TABLE>
<CAPTION>

<S>                          <C>
EXHIBIT G                    Forms of Certification of Trustee
    EXHIBIT G-1              Form of Initial Certification of Trustee
    EXHIBIT G-2              Form of Interim Certification of Trustee
    EXHIBIT G-3              Form of Delay Delivery Certification
EXHIBIT H                    Form of Final Certification of Trustee
EXHIBIT I-1                  Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1                  Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2                  Form of Transferor Certificate for Private Certificates
EXHIBIT K                    Form of Investment Letter (Non-Rule 144A)
EXHIBIT L                    Form of Rule 144A Letter
EXHIBIT M                    Form of Request for Document Release
EXHIBIT N                    Form of Request for File Release
EXHIBIT O                    Copy of Depository Agreement
EXHIBIT P                    [Reserved]
EXHIBIT Q                    Form of Corridor Contracts
    EXHIBIT Q-1              Form of Class AF-1 Corridor Contract
    EXHIBIT Q-2              Form of Class 1-AV-1 Corridor Contract
    EXHIBIT Q-3              Form of Class 2-AV Corridor Contract
    EXHIBIT Q-4              Form of Adjustable Rate Subordinate Corridor Contract
EXHIBIT R                    Class 1-AV-1 Policy
EXHIBIT S                    Form of Corridor Contract Assignment Agreement
EXHIBIT T                    Officer's Certificate with respect to Prepayments
EXHIBIT U                    [Reserved]
SCHEDULE I                   Prepayment Charge Schedule and Prepayment Charge Summary
</TABLE>


                                      v
<PAGE>



               POOLING AND SERVICING AGREEMENT, dated as of November 1, 2004,
by and among CWABS, INC., a Delaware corporation, as depositor (the
"Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller
("CHL" or a "Seller"), COUNTRYWIDE LFT LLC (the "Liquidity Trust" or a
"Seller", and together with CHL, the "Sellers"), COUNTRYWIDE HOME LOANS
SERVICING LP, a Texas limited partnership, as master servicer (the "Master
Servicer"), THE BANK OF NEW YORK, a New York banking corporation, as trustee
(the "Trustee"), and THE BANK OF NEW YORK TRUST COMPANY, N.A., a National
Association, as co-trustee (the "Co-Trustee").

                             PRELIMINARY STATEMENT

               The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The Trust Fund
(excluding the Corridor Contracts, the Credit Comeback Excess Account and the
Carryover Reserve Fund) for federal income tax purposes will consist of three
REMICs ("REMIC 1," "REMIC 2" and the "Master REMIC"). Each Certificate, other
than the Class A-R Certificate, will represent ownership of one or more
regular interests in the Master REMIC for purposes of the REMIC Provisions.
The Class A-R Certificate represents ownership of the sole class of residual
interest in REMIC 1, REMIC 2 and the Master REMIC. The Master REMIC will hold
as assets the several classes of uncertificated REMIC 2 Interests. Each REMIC
2 Interest (other than the R-2-R Interest) is hereby designated as a regular
interest in REMIC 2. REMIC 2 will hold as assets the several classes of REMIC
1 Interests (other than the R-1-R Interest). Each REMIC 1 Interest (other than
the R-1-R Interest) is hereby designated as a regular interest in REMIC 1.
REMIC 1 will hold as assets all property of the Trust Fund (excluding the
Corridor Contracts, the Credit Comeback Excess Account and the Carryover
Reserve Fund). The latest possible maturity date of all REMIC regular
interests created in this Agreement shall be the Latest Possible Maturity
Date.

        REMIC 1:

               The REMIC 1 Interests will have the principal balances,
pass-through rates and Corresponding Loan Groups as set forth below. For the
purpose of the descriptions that follow, (1) Loan Group 1 and the REMIC 1
Interests that correspond to Loan Group 1 are referred to, from time to time,
as the "Fixed Loan Group" and the "Fixed Interests," respectively, and (2)
Loan Group 2 and Loan Group 3 and the REMIC 1 Interests corresponding to Loan
Group 2 and Loan Group 3 are referrred to, from time to time, as the "Variable
Loan Groups" and the "Variable Interests," respectively.

<TABLE>
<CAPTION>

                                                                                 Corresponding
REMIC 1 Interests                          Initial Balance   Pass-Through Rate     Loan Group
-----------------                          ---------------   -----------------     ----------
<S>                                              <C>                <C>                <C>
R-1-F ..............................             (1)                (2)                1
R-1-A-2 (0.9% of SCB Group 2).......             (3)                (2)                2
R-1-B-2 (0.1% of SCB Group 2).......             (3)                (2)                2
R-1-C-2 (0.9% of ASCB Group 2)......             (3)                (2)                2
R-1-D-2 (0.1% of ASCB Group 2)......             (3)                (2)                2
R-1-E-2 (Excess of Group 2).........             (3)                (2)                2
R-1-A-3 (0.9% of SCB Group 3).......             (3)                (2)                3
R-1-B-3 (0.1% of SCB Group 3).......             (3)                (2)                3
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

<S>                                              <C>                <C>                <C>
R-1-C-3 (0.9% of ASCB Group 3)......             (3)                (2)                3
R-1-D-3 (0.1% of ASCB Group 3)......             (3)                (2)                3
R-1-E-3 (Excess of Group 3).........             (3)                (2)                3
R-1-PF..............................            $100                (4)               N/A
R-1-PV..............................            $100                (5)               N/A
R-1-R...............................             (6)                (6)               N/A
</TABLE>
---------------
(1)     The Class F Interest will have a principal balance initially equal to
        the principal balance of Loan Group 1.

(2)     A rate equal to the weighted average of the Adjusted Net Mortgage
        Rates of the Mortgage Loans of the Corresponding Loan Group.

(3)     With respect to the Variable Interests, each REMIC 1 Interest having
        an "R-1-A-" designation (each, an "R-1-A Interest") will have a
        principal balance initially equal to 0.9% of the Subordinate Component
        Balance ("SCB") of its Corresponding Loan Group. Each REMIC 1 Interest
        having an "R-1-B-" designation (each, an "R-1-B Interest") will have a
        principal balance initially equal to 0.1% of the SCB of its
        Corresponding Loan Group. Each REMIC 1 Interest having an "R-1-C-"
        designation (each, an "R-1-C Interest") will have a principal balance
        initially equal to 0.9% of the Adjusted Subordinated Component Balance
        ("ASCB") of the principal balance of its Corresponding Loan Group.
        Each REMIC 1 Interest having an "R-1-D-" designation (each, an "R-1-D
        Interest") will have a principal balance initially equal to 0.1% of
        the ASCB of its Corresponding Loan Group. The initial principal
        balance of each REMIC 1 Interest having an "R-1-E-" designation (each,
        an "R-1-E Interest") will equal the excess of its Corresponding Loan
        Group over the initial aggregate principal balances of the R-1-A,
        R-1-B, R-1-C and R-1-D Interests corresponding to such Loan Group.

(4)     The R-1-PF Interest is entitled to all Prepayment Charges collected
        with respect to the Mortgage Loans in Group 1. It pays no interest.

(5)     The R-1-PV Interest is entitled to all Prepayment Charges collected
        with respect to the Mortgage Loans in Loan Group 2 and Loan Group 3.
        It pays no interest.

(6)     The R-1-R Interest is the sole class of residual interest in REMIC 1.
        It has no principal balance and pays no principal or interest.

        On each Distribution Date, the Interest Funds and Principal Remittance
Amount of the Corresponding Loan Groups shall be distributed with respect to
the REMIC 1 Interests in the following manner:

        (1) Interest. Interest is to be distributed with respect to each REMIC
1 Interest at the rate, or according to the formulas, described above.

        (2) Principal. All principal, Realized Losses and Subsequent
Recoveries arising with respect to Loan Group 1 shall be allocated to the
Fixed Interests.



                                      2
<PAGE>

        (3) Principal if no Cross-Over Situation Exists. If no Cross-Over
Situation exists with respect to any Variable Interest, then principal amounts
distributable with respect to each Variable Loan Group will be allocated:
first to cause the Variable Loan Group's corresponding R-1-A, R-1-B, R-1-C and
R-1-D Interests to equal, respectively, 0.9% of the SCB, 0.1% of the SCB, 0.9%
of the ASCB and 0.1% of the ASCB, of the Corresponding Loan Group, and then to
the corresponding R-1-E Interest.

        (4) Principal if a Cross-Over Situation Exists. If a Cross-Over
Situation exists with respect to the R-1-A and R-1-B Interests then:

        (a) if the Calculation Rate in respect of the outstanding R-1-A and
R-1-B Interests is less than the Subordinate Net Rate Cap, Principal
Relocation Payments will be made proportionately to the outstanding R-1-A
Interests prior to any other Principal Distributions from each such Variable
Loan Group; and

        (b) if the Calculation Rate in respect of the outstanding R-1-A and
R-1-B Interests is greater than the Subordinate Net Rate Cap, Principal
Relocation Payments will be made proportionately to the outstanding R-1-B
Interests prior to any other Principal Distributions from each such Variable
Loan Group.

In each case, Principal Relocation Payments will be made so as to cause the
Calculation Rate in respect of the outstanding R-1-A and R-1-B Interests to
equal the Subordinate Net Rate Cap. With respect to each Variable Loan Group,
if (and to the extent that) the sum of (a) the principal payments comprising
the Principal Remittance Amount received during the Due Period and (b) the
Realized Losses, are insufficient to make the necessary reductions of
principal on the R-1-A and R-1-B Interests, then interest will be added to the
Variable Loan Group's other Interests that are not receiving Principal
Relocation Payments, in proportion to their principal balances. (c) The
outstanding aggregate R-1-A and R-1-B Interests for both Variable Loan Groups
will not be reduced below 1 percent of the excess of (i) the aggregate
outstanding Principal Balances of all Variable Loan Groups as of the end of
any Due Period over (ii) the Senior Certificates related to the Variable Loan
Groups as of the related Distribution Date (after taking into account
distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to the R-1-A and R-1-B Interests of a Variable Loan
Group, and if the Variable Loan Group's corresponding R-1-E Interest has
already been reduced to zero, then the excess principal from that Variable
Loan Group will be paid to the R-1-E Interest of the other Variable Loan Group,
the aggregate R-1-A and R-1-B Interests of which are less than one percent of
the Subordinate Component Balance. If the Variable Loan Group of the
corresponding R-1-E Interest that receives such payment has a weighted average
Adjusted Net Mortgage Rate below the weighted average Adjusted Net Mortgage
Rate of the Variable Loan Group making the payment, then the payment will be
treated by REMIC 1 as a Realized Loss. Conversely, if the Variable Loan Group
of the R-1-E Interest that receives such payment has a weighted average
Adjusted Net Mortgage Rate above the weighted average Adjusted Net Mortgage
Rate of the Variable Loan Group making the payment, then the payment will be
treated by REMIC 1 as a reimbursement for prior Realized Losses.
If a Cross-Over Situation exists with respect to the R-1-C and R-1-D Interests
then:



                                      3
<PAGE>

        (d) if the Calculation Rate in respect of the outstanding R-1-C and
R-1-D Interests is less than the Adjusted Subordinate Net Rate Cap, Principal
Relocation Payments will be made proportionately to the outstanding R-1-C
Interests prior to any other Principal Distributions from each such Variable
Loan Group; and

        (e) if the Calculation Rate in respect of the outstanding R-1-C and
R-1-D Interests is greater than the Adjusted Subordinate Net Rate Cap,
Principal Relocation Payments will be made proportionately to the outstanding
R-1-D Interests prior to any other Principal Distributions from each such
Variable Loan Group.

In each case, Principal Relocation Payments will be made so as to cause the
Calculation Rate in respect of the outstanding R-1-C and R-1-D Interests to
equal the Adjusted Subordinate Net Rate Cap. With respect to each Variable
Loan Group, if (and to the extent that) the sum of (a) the principal payments
comprising the Principal Remittance Amount received during the Due Period and
(b) the Realized Losses, are insufficient to make the necessary reductions of
principal on the R-1-C and R-1-D Interests, then interest will be added to the
Variable Loan Group's other Interests that are not receiving Principal
Relocation Payments, in proportion to their principal balances.

        (f) The outstanding aggregate R-1-C and R-1-D Interests for all
Variable Loan Groups will not be reduced below 1 percent of the excess of (i)
the aggregate outstanding Principal Balances of all Variable Loan Groups as of
the end of any Due Period over (ii) the Senior Certificates related to the
Variable Loan Groups as of the related Distribution Date (after taking into
account distributions of principal on such Distribution Date).

If (and to the extent that) the limitation in paragraph (f) prevents the
distribution of principal to the R-1-C and R-1-D Interests of a Variable Loan
Group, and if the Variable Loan Group's R-1-E Interest has already been
reduced to zero, then the excess principal from that Variable Loan Group will
be paid to the Class E Variable Interests of the other Variable Loan Groups,
the aggregate R-1-C and R-1-D Interests of which are less than one percent of
the Adjusted Subordinate Component Balance. If the Variable Loan Group of the
Class E Variable Interest that receives such payment has a weighted average
Adjusted Net Mortgage Rate below the weighted average Adjusted Net Mortgage
Rate of the Variable Loan Group making the payment, then the payment will be
treated by REMIC 1 as a Realized Loss. Conversely, if the Variable Loan Group
of the Class E Variable Interest that receives such payment has a weighted
average Adjusted Net Mortgage Rate above the weighted average Adjusted Net
Mortgage Rate of the Variable Loan Group making the payment, then the payment
will be treated by REMIC 1 as a reimbursement for prior Realized Losses.

        REMIC 2:



                                      4
<PAGE>

        The REMIC 2 Regular Interests will have the principal balances,
pass-through rates and Corresponding Classes of Certificates as set forth in
the following table:

<TABLE>
<CAPTION>

------------------------- ----------------------- ----------------------- -----------------------
                            Initial Principal                              Corresponding Class
   REMIC 2 Interests             Balance              Interest Rate          of Certificates
------------------------- ----------------------- ----------------------- -----------------------
<S>                                <C>                     <C>                        <C>
R-2-AF-1................           (1)                     (2)                     AF-1
------------------------- ----------------------- ----------------------- -----------------------
R-2-AF-2................           (1)                     (2)                     AF-2
------------------------- ----------------------- ----------------------- -----------------------
R-2-AF-3................           (1)                     (2)                     AF-3
------------------------- ----------------------- ----------------------- -----------------------
R-2-AF-4................           (1)                     (2)                     AF-4
------------------------- ----------------------- ----------------------- -----------------------
R-2-AF-5................           (1)                     (2)                     AF-5
------------------------- ----------------------- ----------------------- -----------------------
R-2-AF-6................           (1)                     (2)                     AF-6
------------------------- ----------------------- ----------------------- -----------------------
R-2-MF-1................           (1)                     (2)                     MF-1
------------------------- ----------------------- ----------------------- -----------------------
R-2-MF-2................           (1)                     (2)                     MF-2
------------------------- ----------------------- ----------------------- -----------------------
R-2-MF-3................           (1)                     (2)                     MF-3
------------------------- ----------------------- ----------------------- -----------------------
R-2-MF-4................           (1)                     (2)                     MF-4
------------------------- ----------------------- ----------------------- -----------------------
R-2-MF-5................           (1)                     (2)                     MF-5
------------------------- ----------------------- ----------------------- -----------------------
R-2-MF-6................           (1)                     (2)                     MF-6
------------------------- ----------------------- ----------------------- -----------------------
R-2-MF-7................           (1)                     (2)                     MF-7
------------------------- ----------------------- ----------------------- -----------------------
R-2-BF..................           (1)                     (2)                      BF
------------------------- ----------------------- ----------------------- -----------------------
R-2-PF                           $100.00                   (3)                      PF
------------------------- ----------------------- ----------------------- -----------------------
R-2-F-Accrual                      (1)                     (2)                     N/A
------------------------- ----------------------- ----------------------- -----------------------
R-2-1-AV-1..............           (4)                     (5)                    1-AV-1
------------------------- ----------------------- ----------------------- -----------------------
R-2-2-AV-1..............           (4)                     (6)                    2-AV-1
------------------------- ----------------------- ----------------------- -----------------------
R-2-2-AV-2..............           (4)                     (6)                    2-AV-2
------------------------- ----------------------- ----------------------- -----------------------
R-2-2-AV-3..............           (4)                     (6)                    2-AV-3
------------------------- ----------------------- ----------------------- -----------------------
R-2-MV-1................           (4)                     (7)                     MV-1
------------------------- ----------------------- ----------------------- -----------------------
R-2-MV-2................           (4)                     (7)                     MV-2
------------------------- ----------------------- ----------------------- -----------------------
R-2-MV-3................           (4)                     (7)                     MV-3
------------------------- ----------------------- ----------------------- -----------------------
R-2-MV-4................           (4)                     (7)                     MV-4
------------------------- ----------------------- ----------------------- -----------------------
R-2-MV-5................           (4)                     (7)                     MV-5
------------------------- ----------------------- ----------------------- -----------------------
R-2-MV-6................           (4)                     (7)                     MV-6
------------------------- ----------------------- ----------------------- -----------------------
R-2-MV-7................           (4)                     (7)                     MV-7
------------------------- ----------------------- ----------------------- -----------------------
R-2-MV-8................           (4)                     (7)                     MV-8
------------------------- ----------------------- ----------------------- -----------------------
R-2-BV..................           (4)                     (7)                      BV
------------------------- ----------------------- ----------------------- -----------------------
R-2-$100................         $100.00                   (8)                     A-R
------------------------- ----------------------- ----------------------- -----------------------
R-2-V-Accrual...........           (4)                     (9)                     N/A
------------------------- ----------------------- ----------------------- -----------------------
R-2-PV..................         $100.00                   (10)                     PV
------------------------- ----------------------- ----------------------- -----------------------
R-2-R...................           (11)                    (11)                    N/A
------------------------- ----------------------- ----------------------- -----------------------
</TABLE>
(1) This REMIC 2 Interest has a principal balance that is initially equal to
50% of its Corresponding Certificate Class issued by the Master REMIC.
Principal payments, both scheduled and prepaid, Realized Losses, Subsequent
Recoveries and interest accruing on the R-2-F-Accrual Interest will be
allocated to this class to maintain its size relative to its Corresponding
Certificate Class (that is, 50%) with any excess payments of principal,
Realized Losses and Subsequent Recoveries being allocated to the R-2-F-Accrual
Interest in such manner as to cause the principal balance of the R-2-F-Accrual
Interest to have a principal balance equal



                                      5
<PAGE>

to (a) 50% of the Loan Group 1 principal balance plus (b) 50% of the Fixed
Rate Overcollateralized Amount for such Distribution Date.
(2) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for this REMIC 2 Interest is a per annum rate equal to the
weighted average of the Adjusted Net Mortgage Rates of the Mortgage Loans in
Loan Group 1 (the "Loan Group 1 Net Rate Cap").
(3) The R-2-PF Interest is entitled to all amounts collected with respect to
the R-1-PF Interest. It pays no interest.
(4) This REMIC 2 Interest has a principal balance that is initially equal to
50% of its Corresponding Certificate Class issued by the Master REMIC.
Principal payments, both scheduled and prepaid, Realized Losses, Subsequent
Recoveries and interest accruing on the R-2-V-Accrual Interest will be
allocated to this class to maintain its size relative to its Corresponding
Certificate Class (that is, 50%) with any excess payments of principal,
Realized Losses and Subsequent Recoveries being allocated to the R-2-V-Accrual
Interest in such manner as to cause the principal balance of the R-2-V-Accrual
Interest to have a principal balance equal to (a) 50% of the Loan Group 2 and
Loan Group 3 principal balances plus (b) 50% of the Adjustable Rate
Overcollateralized Amount for such Distribution Date.
(5) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for this REMIC 2 Interest is a per annum rate equal to the
weighted average of the Adjusted Net Mortgage Rates of the Mortgage Loans in
Loan Group 2 (the "Loan Group 2 Net Rate Cap").
(6) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for this REMIC 2 Interest is a per annum rate equal to the
weighted average of the Adjusted Net Mortgage Rates of the Mortgage Loans in
Loan Group 3 (the "Loan Group 3 Net Rate Cap").
(7) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for this REMIC 2 Interest is a per annum rate equal to the
Adjusted Subordinate Net Rate Cap. For federal income tax purposes the
Adjusted Subordinate Net Rate Cap will equal the Calculation Rate with respect
to the R-1-C and R-1-D REMIC 1 Interests.
(8) This REMIC 2 Interest pays no interest.
(9) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for this REMIC 2 Interest is a per annum rate equal to the
weighted average of the Loan Group 2 Net Rate Cap and the Loan Group 3 Net
Rate Cap (the "Loan Group 2/3 Net Rate Cap").
(10) The R-2-PV Interest is entitled to all amounts collected with respect to
the R-1-PV Interest. It pays no interest.
(11) The R-2-R Interest is the sole class of residual interest in REMIC 2. It
has no principal balance and pays no principal or interest.
         On each Distribution Date, the Interest Funds and Principal
Remittance Amount payable with respect to the REMIC 1 Interests shall be
payable with respect to the REMIC 2 Interests in the following manner:

        (1) Interest. Interest is to be distributed with respect to each REMIC
2 Interest at the rate, or according to the formulas, described above.

        (2) Principal. The Principal Remittance Amount shall be payable among
the REMIC 2 Interests in the same manner that such items are allocated among
their corresponding Certificate Classes.




                                      6
<PAGE>



               The following table specifies the class designation, interest
rate, and principal amount for each class of Master REMIC Interest:

<TABLE>
<CAPTION>

                                              Original Certificate
Class                                           Principal Balance       Pass-Through Rate
-----                                           -----------------       -----------------
<S>                                              <C>                           <C>
Class AF-1..............................           $130,641,000                (1)
Class AF-2..............................            $24,939,000                (1)
Class AF-3..............................            $87,819,000                (1)
Class AF-4..............................            $32,484,000                (1)
Class AF-5..............................            $48,901,000                (1)
Class AF-6..............................            $42,400,000                (1)
Class MF-1..............................            $23,744,000                (1)
Class MF-2..............................             $6,360,000                (1)
Class MF-3..............................             $5,512,000                (1)
Class MF-4..............................             $4,240,000                (1)
Class MF-5..............................             $4,240,000                (1)
Class MF-6..............................             $4,240,000                (1)
Class MF-7..............................             $4,240,000                (1)
Class BF................................             $4,240,000                (1)
Class 1-AV-1............................         $1,010,990,000                (1)
Class 2-AV-1............................           $204,652,000                (1)
Class 2-AV-2............................           $247,131,000                (1)
Class 2-AV-3............................            $52,097,000                (1)
Class MV-1..............................            $88,172,000                (1)
Class MV-2..............................            $63,784,000                (1)
Class MV-3..............................            $43,148,000                (1)
Class MV-4..............................            $34,706,000                (1)
Class MV-5..............................            $29,078,000                (1)
Class MV-6..............................            $34,706,000                (1)
Class MV-7..............................            $26,264,000                (1)
Class MV-8..............................            $22,512,000                (1)
Class BV................................            $18,760,000                (1)
Class CF................................                    (2)                (3)
Class CV................................                    (2)                (4)
Class PF................................                   $100                (5)
Class PV................................                   $100                (5)
Class A-R...............................                   $100                (6)
</TABLE>

(1)      The Certificates will accrue interest at the related Pass-Through
         Rates identified in this Agreement. For federal income tax purposes,
         the pass through rate in respect of (i) each of the Class AF, Class
         MF and Class BF Certificates will be subject to a cap equal to equal
         to the Loan Group 1 Net Rate Cap, (ii) the Class 1-AV-1 Certificates
         will be subject to a cap equal to the Loan Group 2 Net Rate Cap minus
         the Class 1-AV-1 Premium Rate, (iii) the Class 2-AV Certificates will
         be subject to a cap equal to the Loan Group 3 Net Rate Cap, and (iv)
         the Class MV Certificates and the Class BV Certificates will be
         subject to a cap equal to the Adjusted Subordinate Net Rate Cap. Any
         entitlement of any class of Certificates to Net Rate Carryover and
         any entitlement of the Class M and Class B Certificates to interest
         at a rate in excess of Adjusted Subordinate Net Rate Cap, will be
         treated as paid by the Master REMIC to the Class CF Certificates, in
         the case of the Class AF Certificates, the Class MF Certificates and
         the Class BF Certificates, and to the Class CV Certificates, in the
         case of the Class AV Certificates, the Class MV



                                      7
<PAGE>

         Certificates and the Class BV Certificates, and then paid to such
         Class of Certificates pursuant to a limited recourse cap contract as
         described in Section 8.11 herein.
(2)      The Class CF and Class CV Certificates will have Certificate
         Principal Balances equal to the Fixed Rate Overcollateralized Amount
         and Adjustable Rate Overcollateralized Amount, respectively.
(3)      For each Interest Accrual Period the Class CF Certificates are
         entitled to an amount (the "Class CF Distributable Amount") equal to
         a specified portion of the interest on the REMIC 1 Group 1 Interests
         equal to the excess of the Loan Group 1 Net Rate Cap over the product
         of two and the weighted average interest rate of the REMIC 2 Regular
         Interests having an "F" designated in the column entitled "REMIC 2
         Interests" (other than the R-2-PF Interests) with each such Class
         other than the R-2-F-Accrual Interest, subject to a cap equal to the
         Pass-Through Rate of the Corresponding Master REMIC Class and the
         R-2-F-Accrual Interest subject to a cap of 0.00%. The Pass-Through
         Rate of the Class CF Certificates shall be a rate sufficient to
         entitle it to all interest accrued on the REMIC 1 Group 1 Interests
         less the interest accrued on the other F Class interests issued by
         the Master REMIC. The Class CF Distributable Amount for any
         Distribution Date is payable from current interest on the Group 1
         Mortgage Loans.
(4)      For each Interest Accrual Period the Class CV Certificates are
         entitled to an amount (the "Class CV Distributable Amount") equal to
         a specified portion of the interest on the REMIC 1 Group 2 and Group
         3 Interests equal to the excess of the Loan Group 2/3 Net Rate Cap
         over the product of two and the weighted average interest rate of the
         REMIC 2 Regular Interests having a "V" designated in the column
         entitled "REMIC 2 Interests" (other than the R-2-PV Interests) with
         each such Class other than the R-2-V-Accrual Interest, subject to a
         cap equal to the Pass-Through Rate of the Corresponding Master REMIC
         Class and the R-2-V-Accrual Interest subject to a cap of 0.00%. The
         Pass-Through Rate of the Class CV Certificates shall be a rate
         sufficient to entitle it to all interest accrued on the REMIC 1 Group
         2 and Group 3 Interests less the interest accrued on the other V
         Class interests issued by the Master REMIC. The Class CV
         Distributable Amount for any Distribution Date is payable from
         current interest on the Group 2 and Group 3 Mortgage Loans.
(5)      For each Distribution Date the Class PF and Class PV Certificates are
         entitled to all Prepayment Charges distributed with respect to the
         R-3-PF and R-3-PV Interests, respectively.
(6)      The Class A-R Certificates represent the sole class of residual
         interest in each REMIC created hereunder. The Class A-R Certificates
         are not entitled to distributions of interest.

        The foregoing REMIC structure is intended to cause all of the cash
from the Mortgage Loans to flow through to the Master REMIC as cash flow on a
REMIC regular interest, without creating any shortfall--actual or potential
(other than for credit losses) to any REMIC regular interest. To the extent
that the structure is believed to diverge from such intention the Trustee will
resolve ambiguities to accomplish such result and will to the extent necessary
rectify any drafting errors or seek clarification to the structure without
Certificateholder approval (but with guidance of counsel selected by it with
due care and which has substantial experience with similar REMIC structures)
to accomplish such intention.




                                      8
<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
meanings:

               Accrual Period: With respect to any Distribution Date and each
Class of Adjustable Rate Certificates, the period commencing on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately
preceding such Distribution Date. With respect to any Distribution Date and
each Class of Fixed Rate Certificates and the Class C Certificates, the
calendar month preceding the month in which such Distribution Date occurs. All
calculations of interest on the Adjustable Rate Certificates will be made on
the basis of the actual number of days elapsed in the related Accrual Period
and on a 360-day year. All calculations of interest on the Fixed Rate
Certificates and Class C Certificates will be made on the basis of a 360-day
year consisting of twelve 30-day months.

               Adjustable Rate Certificates: The Class AF-1 Certificates, the
Class AV Certificates and the Adjustable Rate Subordinate Certificates.

               Adjustable Rate Cumulative Loss Trigger Event: With respect to
a Distribution Date on or after the Adjustable Rate Stepdown Date, an
Adjustable Rate Cumulative Loss Trigger Event occurs if (x) the aggregate
amount of Realized Losses on the Mortgage Loans in Loan Group 2 and Loan Group
3 from (and including) the Cut-off Date for each such Mortgage Loan to (and
including) the last day of the related Due Period (reduced by the aggregate
amount of any Subsequent Recoveries related to the Mortgage Loans in Loan
Group 2 or Loan Group 3 received through the last day of that Due Period)
exceeds (y) the applicable percentage, for such Distribution Date, of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans in Loan Group 2
and Loan Group 3, as set forth below:



                                      9
<PAGE>

<TABLE>
<CAPTION>


    Distribution Date                            Percentage
    -----------------                            ----------
<S>                                              <C>
    December 2007 -- November 2008..........     3.00% with respect to December
                                                 2007, plus an additional 1/12th
                                                 of 1.75% for each month
                                                 thereafter through November 2008
    December 2008 -- November 2009..........     4.75% with respect to December
                                                 2008, plus an additional 1/12th
                                                 of 1.25% for each month
                                                 thereafter through November 2009
    December 2009 -- November 2010..........     6.00% with respect to December
                                                 2009, plus an additional 1/12th
                                                 of 0.75% for each month
                                                 thereafter through November 2010
    December 2010 and thereafter...........      6.75%
</TABLE>


               Adjustable Rate Delinquency Trigger Event: With respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date, an Adjustable
Rate Delinquency Trigger Event exists if the Rolling Sixty-Day Delinquency
Rate for Outstanding Mortgage Loans in Loan Group 2 and Loan Group 3 equals or
exceeds the product of 37.00% and the Adjustable Rate Senior Enhancement
Percentage for such Distribution Date.

               Adjustable Rate Loan Group Excess Cashflow: With respect to any
Distribution Date the sum of (i) the amount remaining after the distribution
of interest to Certificateholders and the payment of monthly premium for the
Class 1-AV-1 Policy and any Class 1-AV-1 Reimbursement Amount to the Class
1-AV-1 Insurer, in each case for such Distribution Date pursuant to Section
4.04(b)(iii)(j), and (ii) the amount remaining after the distribution of
principal to Certificateholders and the payment of any unpaid monthly premium
for the Class 1-AV-1 Policy and any unpaid Class 1-AV-1 Reimbursement Amount
to the Class 1-AV-1 Insurer, in each case for such Distribution Date pursuant,
to Section 4.04(d)(1)(B)(x) or 4.04(d)(2)(L).

               Adjustable Rate OC Floor: For any Distribution Date, an amount
equal to 0.50% of the aggregate Cut-off Date Principal Balance of the Mortgage
Loans in Loan Group 2 and Loan Group 3.

               Adjustable Rate Overcollateralization Deficiency Amount: With
respect to any Distribution Date, the amount, if any, by which the Adjustable
Rate Overcollateralization Target Amount exceeds the Adjustable Rate
Overcollateralized Amount on such Distribution Date (after giving effect to
distributions in respect of the Principal Remittance Amount for Loan Group 2
and Loan Group 3 on such Distribution Date).

               Adjustable Rate Overcollateralization Target Amount: With
respect to any Distribution Date (a) prior to the Adjustable Rate Stepdown
Date, an amount equal to 3.30% of the aggregate Cut-off Date Principal Balance
of the Mortgage Loans in Loan Group 2 and Loan Group 3 and (b) on or after the
Adjustable Rate Stepdown Date, the greater of (i) an amount equal to 6.60% of
the aggregate Stated Principal Balance of the Mortgage Loans in Loan



                                      10
<PAGE>

Group 2 and Loan Group 3 for the current Distribution Date and (ii) the
Adjustable Rate OC Floor; provided, however, that if an Adjustable Rate
Trigger Event is in effect on any Distribution Date, the Adjustable Rate
Overcollateralization Target Amount will be the Adjustable Rate
Overcollateralization Target Amount as in effect for the prior Distribution
Date.

               Adjustable Rate Overcollateralized Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group 3 for
such Distribution Date exceeds (y) the sum of the aggregate Certificate
Principal Balance of the Class AV Certificates and the Adjustable Rate
Subordinate Certificates as of such Distribution Date (after giving effect to
distributions of the Principal Remittance Amount for Loan Group 2 and Loan
Group 3 to be made on such Distribution Date).

               Adjustable Rate Senior Enhancement Percentage: With respect to
a Distribution Date on or after the Adjustable Rate Stepdown Date, the
fraction (expressed as a percentage) (1) the numerator of which is the excess
of (a) the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2 and Loan Group 3 for the preceding Distribution Date over (b) (i)
before the Certificate Principal Balances of the Class AV Certificates have
been reduced to zero, the sum of the Certificate Principal Balances of the
Class AV Certificates, or (ii) after such time, the Certificate Principal
Balance of the most senior Class of Adjustable Rate Subordinate Certificates
outstanding, as of the preceding Master Servicer Advance Date, and (2) the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2 and Loan Group 3 for the preceding Distribution Date.

               Adjustable Rate Stepdown Date: The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class AV Certificates is reduced to zero, and (ii) the later to occur of (x)
the Distribution Date in December 2007 and (y) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class AV Certificates
(after calculating anticipated distributions on such Distribution Date) is
less than or equal to 54.90% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date.

               Adjustable Rate Subordinate Certificates: Any Class MV-1, Class
MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8
or Class BV Certificates.

               Adjustable Rate Subordinate Corridor Contract: The transaction
evidenced by the related Confirmation (as assigned to the Trustee pursuant to
the Corridor Contract Assignment Agreement), a form of which is attached
hereto as Exhibit Q-4.

               Adjustable Rate Subordinate Corridor Contract Termination Date:
With respect to the Adjustable Rate Subordinate Corridor Contract, the
Distribution Date in April 2009.

               Adjustable Rate Subordinate Net Rate Cap: With respect to any
Distribution Date and each Class of Adjustable Rate Subordinate Certificates,
the weighted average of (a) the weighted average Adjusted Net Mortgage Rate of
the Mortgage Loans in Loan Group 2 on such Distribution Date (weighted by an
amount equal to the positive difference (if any) of the



                                      11
<PAGE>

aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 over
the outstanding Certificate Principal Balance of the Class 1-AV-1
Certificates) and (b) the weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 3 on such Distribution Date (weighted by an
amount equal to the positive difference (if any) of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 3 over the outstanding
aggregate Certificate Principal Balance of the Class 2-AV Certificates),
adjusted to an effective rate reflecting the calculation of interest on the
basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year.

               Adjustable Rate Trigger Event: With respect to any Distribution
Date on or after the Adjustable Rate Stepdown Date, either an Adjustable Rate
Delinquency Trigger Event with respect to that Distribution Date or an
Adjustable Rate Cumulative Loss Trigger Event with respect to that
Distribution Date.

               Adjusted Net Mortgage Rate: As to each Mortgage Loan, the
Mortgage Rate less the related Expense Fee Rate.

               Adjusted Subordinate Component Balance: With respect to any
Distribution Date and for any Variable Loan Group, (i) the principal balance
of such Variable Loan Group as of the first day of the related Due Period
(after giving effect to Principal Prepayments received in the Prepayment
Period ending during such Due Period) less (ii) the product of (a) the
Adjustable Rate Overcollateralized Amount and (b)(I) the principal balance of
such Variable Loan Group, divided by (II) the sum of the principal balance of
the Mortgage Loans, as of the first day of the related Due Period, less (iii)
the aggregate Certificate Principal Balance of the related Classes of Senior
Certificates in either case immediately prior to such Distribution Date.

               Adjusted Subordinate Net Rate Cap: For each Distribution Date,
the weighted average of the Group 2 Net Rate Cap and Group 3 Net Rate Cap
weighted on the basis of the respective Adjusted Subordinate Component Balance
of their corresponding Loan Groups. For federal income tax purposes, the
Adjusted Subordinate Net Rate Cap will be the Calculation Rate in respect of
the Class C and Class D Interests in REMIC 2.

               Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date on which the related Mortgage Rate is subject to adjustment, as provided
in the related Mortgage Note.

               Advance: The aggregate of the advances required to be made by
the Master Servicer with respect to any Distribution Date pursuant to Section
4.01, the amount of any such advances being equal to the aggregate of payments
of principal and interest on the Mortgage Loans (net of the Servicing Fees)
that were due on the related Due Date and not received by the Master Servicer
as of the close of business on the related Determination Date including an
amount equivalent to interest on each Mortgage Loan as to which the related
Mortgaged Property is an REO Property; provided, however, that the net monthly
rental income (if any) from such REO Property deposited in the Certificate
Account for such Distribution Date pursuant to Section 3.12 may be used to
offset such Advance for the related REO Property; provided, further, that for
the avoidance of doubt, no Advances shall be required to be made in respect of
any Liquidated Mortgage Loan.



                                      12
<PAGE>

               Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.

               Amount Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Certificate Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage
Loans due after the related Due Date, (ii) Principal Prepayments received in
respect of such Mortgage Loans after the last day of the related Prepayment
Period and (iii) Liquidation Proceeds and Subsequent Recoveries received in
respect of such Mortgage Loans after the last day of the related Due Period.

               Applied Realized Loss Amount: With respect to any Distribution
Date and (i) Loan Group 1, the sum of the Realized Losses with respect to the
Mortgage Loans in Loan Group 1 which are to be applied in reduction of the
Certificate Principal Balances of the Fixed Rate Subordinate Certificates
pursuant to this Agreement, which shall equal the amount, if any, by which,
the aggregate Certificate Principal Balance of the Fixed Rate Certificates
(after all distributions of principal on such Distribution Date) exceeds the
Stated Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date and (ii) Loan Group 2 and Loan Group 3, the sum of the
Realized Losses with respect to the Mortgage Loans in Loan Group 2 and Loan
Group 3 which are to be applied in reduction of the Certificate Principal
Balances of the Adjustable Rate Subordinate Certificates pursuant to this
Agreement, which shall equal the amount, if any, by which, the aggregate
Certificate Principal Balance of the Adjustable Rate Certificates (after all
distributions of principal on such Distribution Date) exceeds the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3.

               Appraised Value: The appraised value of the Mortgaged Property
based upon the appraisal made for the originator of the related Mortgage Loan
by an independent fee appraiser at the time of the origination of the related
Mortgage Loan, or the sales price of the Mortgaged Property at the time of
such origination, whichever is less, or with respect to any Mortgage Loan
originated in connection with a refinancing, the appraised value of the
Mortgaged Property based upon the appraisal made at the time of such
refinancing.

               Bankruptcy Code:  Title 11 of the United States Code.

               Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Interest Bearing Certificates constitutes a Class of
Book-Entry Certificates.

               Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which the Class 1-AV-1 Insurer or banking institutions in the
State of New York or California are authorized or obligated by law or
executive order to be closed.

               Calculation Rate: For each Distribution Date, in the case of
the R-2-A and R-2-B Interests, the product of (i) 10 and (ii) the weighted
average rate of the outstanding R-2-A and R-



                                      13
<PAGE>

2-B Interests, treating each R-2-A Interest as capped at zero or reduced by a
fixed percentage of 100% of the interest accruing on such Class. For each
Distribution Date, in the case of the R-2-C and R-2-D Interests, the product
of (i) 10 and (ii) the weighted average rate of the outstanding R-2-C and
R-2-D Interests, treating each R-2-C Interest as capped at zero or reduced by
a fixed percentage of 100% of the interest accruing on such Class.

               Carryover Reserve Fund: The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 4.08 in the name
of the Trustee for the benefit of the Certificateholders and designated "The
Bank of New York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-12". Funds in the Carryover Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.

               Certificate: Any one of the certificates of any Class executed
and authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-27, Exhibits B-1 and B-2, Exhibits C-1 and C-2, Exhibit
D and Exhibit E.

               Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of
the Trustee on behalf of the Certificateholders and the Class 1-AV-1 Insurer
and designated "Countrywide Home Loans Servicing LP in trust for registered
Holders of CWABS, Inc., Asset-Backed Certificates, Series 2004-12". Funds in
the Certificate Account shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement.

               Certificate Owner: With respect to a Book-Entry Certificate,
the person that is the beneficial owner of such Book-Entry Certificate.

               Certificate Principal Balance: As to any Certificate (other
than the Class C Certificates) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate (A) less the sum of (i) all
amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant
to Section 4.04(c) or 4.04(d) and, with respect to the Class 1-AV-1
Certificates only, payments under the Class 1-AV-1 Policy relating to
principal, and (ii) with respect to any Subordinate Certificates, any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates pursuant to Section 4.04(j) or 4.04(k), and (B) increased by, with
respect to the Subordinate Certificates, any Subsequent Recoveries allocated
to such Subordinate Certificate pursuant to Section 4.04(l) or 4.04(m) on such
Distribution Date. References herein to the Certificate Principal Balance of a
Class of Certificates shall mean the Certificate Principal Balances of all
Certificates in such Class. The Class C Certificates do not have a Certificate
Principal Balance. With respect to any Certificate (other than the Class C
Certificates) of a Class and any Distribution Date, the portion of the
Certificate Principal Balance of such Class represented by such Certificate
equal to the product of the Percentage Interest evidenced by such Certificate
and the Certificate Principal Balance of such Class. Exclusively for the
purpose of determining any subrogation rights of the Class 1-AV-1 Insurer
arising under Section 4.06 hereof, the "Certificate Principal Balance" of the
Class 1-AV-1 Certificates shall not be reduced by the amount of any payments
made by the Class 1-AV-1 Insurer in respect of principal on such



                                      14
<PAGE>

Certificates under the Class 1-AV-1 Policy, except to the extent such payment
shall have been reimbursed to the Class 1-AV-1 Insurer pursuant to the
provisions of this Agreement.

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

               Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register (initially, Cede & Co.,
as nominee for the Depository, in the case of any Class of Book-Entry
Certificates), except that solely for the purpose of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any affiliate of the Depositor shall be deemed not to be
Outstanding and the Voting Interest evidenced thereby shall not be taken into
account in determining whether the requisite amount of Voting Interests
necessary to effect such consent has been obtained; provided that if any such
Person (including the Depositor) owns 100% of the Voting Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof (other than the second
sentence of Section 10.01 hereof) that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Trustee is entitled to rely conclusively on a certification of
the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the Depositor.

               CHL: Countrywide Home Loans, Inc., a New York corporation, and
its successors and assigns.

               CHL Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which CHL is the applicable Seller.

               Class: All Certificates bearing the same Class designation as
set forth in Section 5.01 hereof.

               Class 1-AV-1 Certificate: Any Certificate designated as a
"Class 1-AV-1 Certificate" on the face thereof, in the form of Exhibit A-15
hereto, representing the right to distributions as set forth herein.

               Class 1-AV-1 Corridor Contract: The transaction evidenced by
the related Confirmation (as assigned to the Trustee pursuant to the Corridor
Contract Assignment Agreement), a form of which is attached hereto as Exhibit
Q-2.

               Class 1-AV-1 Corridor Contract Termination Date: With respect
to the Class 1-AV-1 Corridor Contract, the Distribution Date in May 2009.

               Class 1-AV-1 Insurer: MBIA Insurance Corporation, a subsidiary
of MBIA Inc., organized and created under the laws of the State of New York,
or any successor thereto.

               Class 1-AV-1 Insurer Contact Person: The officer designated by
the Master Servicer to provide information to the Class 1-AV-1 Insurer
pursuant to Section 4.06(i).

               Class 1-AV-1 Insurer Default: Any one of the following events:
(i) the Class 1-AV-1 Insurer shall have failed to make a required payment
under the Class 1-AV-1 Policy, (ii) a



                                      15
<PAGE>

proceeding in bankruptcy shall have been instituted by the Class 1-AV-1
Insurer, or (iii) a decree or order for relief shall have been issued in
respect of a proceeding in bankruptcy against the Class 1-AV-1 Insurer and
shall remain unstayed for a period of 60 consecutive days.

               Class 1-AV-1 Late Payment Rate: The rate of interest publicly
announced by Citibank, N.A. at its principal office in New York, New York, as
its prime rate (any change in such prime rate of interest to be effective on
the date such change is announced by Citibank, N.A.) plus 3%. The Class 1-AV-1
Late Payment Rate shall be computed on the basis of a year of 365 days
calculating the actual number of days elapsed. In no event shall the Class
1-AV-1 Late Payment Rate exceed the maximum rate permissible under law
applicable to this Agreement limiting interest rates.

               Class 1-AV-1 Net Rate Cap: For any Distribution Date, the
weighted average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan
Group 2 for such Distribution Date less the Class 1-AV-1 Premium Rate,
adjusted to an effective rate reflecting the calculation of interest on the
basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year.

               Class 1-AV-1 Policy: The irrevocable Certificate Guaranty
Insurance Policy, No. 45328, including any endorsements thereto, issued by the
Class 1-AV-1 Insurer with respect to the Class 1-AV-1 Certificates, in the
form attached hereto as Exhibit R.

               Class 1-AV-1 Policy Payments Account: The separate Eligible
Account created and maintained by the Trustee pursuant to Section 4.06(c) in
the name of the Trustee for the benefit of the Class 1-AV-1 Certificateholders
and designated "The Bank of New York in trust for registered Holders of CWABS,
Inc., Asset-Backed Certificates, Series 2004-12, Class 1-AV-1". Funds in the
Class 1-AV-1 Policy Payments Account shall be held in trust for the Class
1-AV-1 Certificateholders for the uses and purposes set forth in this
Agreement.

               Class 1-AV-1 Premium: With respect to the Class 1-AV-1 Policy
and any Distribution Date, an amount equal to the product of (i) one-twelfth
(1/12) of the Class 1-AV-1 Premium Rate and (ii) the Class 1-AV-1 Certificate
Principal Balance immediately prior to such Distribution Date.

               Class 1-AV-1 Premium Rate: The "premium percentage" set forth
in the Commitment Letter, dated as of November 24, 2004, between the Class
1-AV-1 Insurer and Countrywide Securities Corporation relating to the Class
1-AV-1 Policy.

               Class 1-AV-1 Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class AV Principal Distribution
Target Amount and (y) a fraction, the numerator of which is the Class 1-AV-1
Principal Distribution Target Amount and the denominator of which is the sum
of the Class 1-AV-1 Principal Distribution Target Amount and the Class 2-AV
Principal Distribution Target Amount.

               Class 1-AV-1 Principal Distribution Target Amount: With respect
to any Distribution Date, the excess of (1) the Certificate Principal Balance
of the Class 1-AV-1 Certificates immediately prior to such Distribution Date,
over (2) the lesser of (x) 54.90% of the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 for such Distribution



                                      16
<PAGE>

Date and (y) the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 2 for such Distribution Date minus 0.50% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 as of the Cut-off
Date.

               Class 1-AV-1 Reimbursement Amount: With respect to any
Distribution Date, (i) all Insured Payments paid by the Class 1-AV-1 Insurer,
but for which the Class 1-AV-1 Insurer has not been reimbursed prior to such
Distribution Date, plus (ii) interest accrued on such Insured Payments not
previously repaid calculated at the Class 1-AV-1 Late Payment Rate from the
date such Insured Payments were made.

               Class 2-AV-1 Certificate: Any Certificate designated as a
"Class 2-AV-1 Certificate" on the face thereof, in the form of Exhibit A-16
hereto, representing the right to distributions as set forth herein.

               Class 2-AV-2 Certificate: Any Certificate designated as a
"Class 2-AV-2 Certificate" on the face thereof, in the form of Exhibit A-17
hereto, representing the right to distributions as set forth herein.

               Class 2-AV-3 Certificate: Any Certificate designated as a
"Class 2-AV-3 Certificate" on the face thereof, in the form of Exhibit A-18
hereto, representing the right to distributions as set forth herein.

               Class 2-AV Certificate: Any Class 2-AV-1, Class 2-AV-2 or Class
2-AV-3 Certificate.

               Class 2-AV Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the Trustee pursuant to the Corridor
Contract Assignment Agreement), a form of which is attached hereto as Exhibit
Q-3.

               Class 2-AV Corridor Contract Termination Date: With respect to
the Class 2-AV Corridor Contract, the Distribution Date in April 2009.

               Class 2-AV Net Rate Cap: For any Distribution Date, the
weighted average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan
Group 3 for such Distribution Date, adjusted to an effective rate reflecting
the calculation of interest on the basis of the actual number of days elapsed
during the related Accrual Period and a 360-day year.

               Class 2-AV Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class AV Principal Distribution
Target Amount and (y) a fraction, the numerator of which is the Class 2-AV
Principal Distribution Target Amount and the denominator of which is the sum
of the Class 1-AV-1 Principal Distribution Target Amount and the Class 2-AV
Principal Distribution Target Amount.

               Class 2-AV Principal Distribution Target Amount: With respect
to any Distribution Date, the excess of (1) the aggregate Certificate
Principal Balance of the Class 2-AV Certificates immediately prior to such
Distribution Date, over (2) the lesser of (x) 54.90% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 3 for such Distribution
Date and (y) the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 3 for



                                      17
<PAGE>

such Distribution Date minus 0.50% of the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group 3 as of the Cut-off Date.

               Class AF Certificate: Any Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-5 or Class AF-6 Certificate.

               Class AF Net Rate Cap: For any Distribution Date, the weighted
average Adjusted Net Mortgage Rate on the Mortgage Loans in Loan Group 1 for
such Distribution Date, adjusted in the case of the Class AF-1 Certificates
only, to an effective rate reflecting the calculation of interest on the basis
of the actual number of days elapsed during the related Accrual Period and a
360-day year.

               Class AF Principal Distribution Amount: With respect to any
Distribution Date, the excess of (1) the aggregate Certificate Principal
Balance of the Class AF Certificates immediately prior to such Distribution
Date, over (2) the lesser of (x) 68.80% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group
1 for such Distribution Date minus the Fixed Rate OC Floor.

               Class AF-1 Certificate: Any Certificate designated as a "Class
AF-1 Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.

               Class AF-1 Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the Trustee pursuant to the Corridor
Contract Assignment Agreement), a form of which is attached hereto as Exhibit
Q-1.

               Class AF-1 Corridor Contract Termination Date: With respect to
the Class AF-1 Corridor Contract, the Distribution Date in September 2006.

               Class AF-2 Certificate: Any Certificate designated as a "Class
AF-2 Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.

               Class AF-3 Certificate: Any Certificate designated as a "Class
AF-3 Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.

               Class AF-4 Certificate: Any Certificate designated as a "Class
AF-4 Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.

               Class AF-5 Certificate: Any Certificate designated as a "Class
AF-5 Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.



                                      18
<PAGE>

               Class AF-6 Certificate: Any Certificate designated as a "Class
AF-6 Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.

               Class AF-6 Portion: For any Distribution Date, a percentage,
expressed as a fraction, the numerator of which is the Certificate Principal
Balance of the Class AF-6 Certificates immediately prior to such Distribution
Date and the denominator of which is the aggregate Certificate Principal
Balance of all Classes of the Class AF Certificates immediately prior to such
Distribution Date.

               Class A-R Certificate: Any Certificate designated as a "Class
A-R Certificate" on the face thereof, in the form of Exhibit D hereto or, in
the case of the Tax Matters Person Certificate, Exhibit E hereto, in either
case representing the right to distributions as set forth herein.

               Class AV Certificate: Any Class 1-AV-1 or Class 2-AV
Certificate.

               Class BF Certificate: Any Certificate designated as a "Class BF
Certificate" on the face thereof, in the form of Exhibit A-14 hereto,
representing the right to distributions as set forth herein.

               Class BF Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date) (e) the Certificate
Principal Balance of the Class MF-4 Certificates (after taking into account
distribution of the Class MF-4 Principal Distribution Amount for such
Distribution Date), (f) the Certificate Principal Balance of the Class MF-5
Certificates (after taking into account distribution of the Class MF-5
Principal Distribution Amount for such Distribution Date), (g) the Certificate
Principal Balance of the Class MF-6 Certificates (after taking into account
distribution of the Class MF-6 Principal Distribution Amount for such
Distribution Date), (h) the Certificate Principal Balance of the Class MF-7
Certificates (after taking into account distribution of the Class MF-7
Principal Distribution Amount for such Distribution Date) and (i) the
Certificate Principal Balance of the Class BF Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 95.60% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for such Distribution Date minus the Fixed Rate
OC Floor; provided, however, that if the Class BF Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class BF Certificates will be entitled to receive the entire
remaining Principal Distribution Amount for Loan Group 1 until the Certificate
Principal Balance thereof is reduced to zero.



                                      19
<PAGE>

               Class BV Certificate: Any Certificate designated as a "Class BV
Certificate" on the face thereof, in the form of Exhibit A-27 hereto,
representing the right to distributions as set forth herein.

               Class BV Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class 1-AV-1 and Class 2-AV Certificates (after
taking into account distributions of the Class 1-AV-1 Principal Distribution
Amount and Class 2-AV Principal Distribution Amount for such Distribution
Date), (b) the Certificate Principal Balance of the Class MV-1 Certificates
(after taking into account distribution of the Class MV-1 Principal
Distribution Amount on such Distribution Date), (c) the Certificate Principal
Balance of the Class MV-2 Certificates (after taking into account distribution
of the Class MV-2 Principal Distribution Amount on such Distribution Date),
(d) the Certificate Principal Balance of the Class MV-3 Certificates (after
taking into account distribution of the Class MV-3 Principal Distribution
Amount on such Distribution Date), (e) the Certificate Principal Balance of
the Class MV-4 Certificates (after taking into account distribution of the
Class MV-4 Principal Distribution Amount on such Distribution Date), (f) the
Certificate Principal Balance of the Class MV-5 Certificates (after taking
into account distribution of the Class MV-5 Principal Distribution Amount on
such Distribution Date), (g) the Certificate Principal Balance of the Class
MV-6 Certificates (after taking into account distribution of the Class MV-6
Principal Distribution Amount on such Distribution Date), (h) the Certificate
Principal Balance of the Class MV-7 Certificates (after taking into account
distribution of the Class MV-7 Principal Distribution Amount on such
Distribution Date), (i) the Certificate Principal Balance of the Class MV-8
Certificates (after taking into account distribution of the Class MV-8
Principal Distribution Amount on such Distribution Date) and (j) the
Certificate Principal Balance of the Class BV Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 93.40% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor; provided, however, that if the Class BV
Certificates are the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, the Class BV Certificates will be
entitled to receive the entire remaining aggregate Principal Distribution
Amount for Loan Group 2 and Loan Group 3 until the Certificate Principal
Balance thereof is reduced to zero.

               Class C Certificate:  Any Class CF or Class CV Certificate.

               Class CF Certificate: Any Certificate designated as a "Class CF
Certificate" on the face thereof, in the form of Exhibit C-1 hereto,
representing the right to distributions as set forth herein.

               Class CF Distributable Amount: As defined in the Preliminary
Statement.

               Class CV Certificate: Any Certificate designated as a "Class CV
Certificate" on the face thereof, in the form of Exhibit C-2 hereto,
representing the right to distributions as set forth herein.

               Class CV Distributable Amount: As defined in the Preliminary
Statement.



                                      20
<PAGE>

               Class MF-1 Certificate: Any Certificate designated as a "Class
MF-1 Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.

               Class MF-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date) and (b) the Certificate Principal Balance of the Class MF-1
Certificates immediately prior to such Distribution Date, over (ii) the lesser
of (x) 80.00% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 1 for such Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1 for such Distribution
Date minus the Fixed Rate OC Floor; provided, however, that if the Class MF-1
Certificates are the only Class of Fixed Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MF-1 Certificates will be
entitled to receive the entire remaining Principal Distribution Amount for
Loan Group 1 until the Certificate Principal Balance thereof is reduced to
zero.

               Class MF-2 Certificate: Any Certificate designated as a "Class
MF-2 Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.

               Class MF-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date) and (c) the
Certificate Principal Balance of the Class MF-2 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 83.00% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for such Distribution Date minus the Fixed Rate
OC Floor; provided, however, that if the Class MF-2 Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MF-2 Certificates will be entitled to receive the entire
remaining Principal Distribution Amount for Loan Group 1 until the Certificate
Principal Balance thereof is reduced to zero.

               Class MF-3 Certificate: Any Certificate designated as a "Class
MF-3 Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.

               Class MF-3 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such



                                      21
<PAGE>

Distribution Date) and (d) the Certificate Principal Balance of the Class MF-3
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 85.60% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 1 for such Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1 for such Distribution
Date minus the Fixed Rate OC Floor; provided, however, that if the Class MF-3
Certificates are the only Class of Fixed Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MF-3 Certificates will be
entitled to receive the entire remaining Principal Distribution Amount for
Loan Group 1 until the Certificate Principal Balance thereof is reduced to
zero.

               Class MF-4 Certificate: Any Certificate designated as a "Class
MF-4 Certificate" on the face thereof, in the form of Exhibit A-10 hereto,
representing the right to distributions as set forth herein.

               Class MF-4 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date) and (e) the
Certificate Principal Balance of the Class MF-4 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 87.60% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for such Distribution Date minus the Fixed Rate
OC Floor; provided, however, that if the Class MF-4 Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MF-4 Certificates will be entitled to receive the entire
remaining Principal Distribution Amount for Loan Group 1 until the Certificate
Principal Balance thereof is reduced to zero.

               Class MF-5 Certificate: Any Certificate designated as a "Class
MF-5 Certificate" on the face thereof, in the form of Exhibit A-11 hereto,
representing the right to distributions as set forth herein.

               Class MF-5 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date), (e) the Certificate
Principal Balance of the Class MF-4 Certificates (after



                                      22
<PAGE>

taking into account distribution of the Class MF-4 Principal Distribution
Amount for such Distribution Date) and (f) the Certificate Principal Balance
of the Class MF-5 Certificates immediately prior to such Distribution Date
over (ii) the lesser of (x) 89.60% of the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group 1 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1 for
such Distribution Date minus the Fixed Rate OC Floor; provided, however, that
if the Class MF-5 Certificates are the only Class of Fixed Rate Subordinate
Certificates outstanding on such Distribution Date, the Class MF-5
Certificates will be entitled to receive the entire remaining Principal
Distribution Amount for Loan Group 1 until the Certificate Principal Balance
thereof is reduced to zero.

               Class MF-6 Certificate: Any Certificate designated as a "Class
MF-6 Certificate" on the face thereof, in the form of Exhibit A-12 hereto,
representing the right to distributions as set forth herein.

               Class MF-6 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date), (e) the Certificate
Principal Balance of the Class MF-4 Certificates (after taking into account
distribution of the Class MF-4 Principal Distribution Amount for such
Distribution Date), (f) the Certificate Principal Balance of the Class MF-5
Certificates (after taking into account distribution of the Class MF-5
Principal Distribution Amount for such Distribution Date) and (g) the
Certificate Principal Balance of the Class MF-6 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 91.60% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for such Distribution Date minus the Fixed Rate
OC Floor; provided, however, that if the Class MF-6 Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MF-6 Certificates will be entitled to receive the entire
remaining Principal Distribution Amount for Loan Group 1 until the Certificate
Principal Balance thereof is reduced to zero.

               Class MF-7 Certificate: Any Certificate designated as a "Class
MF-7 Certificate" on the face thereof, in the form of Exhibit A-13 hereto,
representing the right to distributions as set forth herein.

               Class MF-7 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such



                                      23
<PAGE>

Distribution Date), (c) the Certificate Principal Balance of the Class MF-2
Certificates (after taking into account distribution of the Class MF-2
Principal Distribution Amount for such Distribution Date), (d) the Certificate
Principal Balance of the Class MF-3 Certificates (after taking into account
distribution of the Class MF-3 Principal Distribution Amount for such
Distribution Date), (e) the Certificate Principal Balance of the Class MF-4
Certificates (after taking into account distribution of the Class MF-4
Principal Distribution Amount for such Distribution Date), (f) the Certificate
Principal Balance of the Class MF-5 Certificates (after taking into account
distribution of the Class MF-5 Principal Distribution Amount for such
Distribution Date), (g) the Certificate Principal Balance of the Class MF-6
Certificates (after taking into account distribution of the Class MF-6
Principal Distribution Amount for such Distribution Date) and (h) the
Certificate Principal Balance of the Class MF-7 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 93.60% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for such Distribution Date minus the Fixed Rate
OC Floor; provided, however, that if the Class MF-7 Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MF-7 Certificates will be entitled to receive the entire
remaining Principal Distribution Amount for Loan Group 1 until the Certificate
Principal Balance thereof is reduced to zero.

               Class MV-1 Certificate: Any Certificate designated as a "Class
MV-1 Certificate" on the face thereof, in the form of Exhibit A-19 hereto,
representing the right to distributions as set forth herein.

               Class MV-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date) and (b) the
Certificate Principal Balance of the Class MV-1 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 64.30% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor; provided, however, that if the Class MV-1
Certificates are the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MV-1 Certificates will be
entitled to receive the entire remaining aggregate Principal Distribution
Amount for Loan Group 2 and Loan Group 3 until the Certificate Principal
Balance thereof is reduced to zero.

               Class MV-2 Certificate: Any Certificate designated as a "Class
MV-2 Certificate" on the face thereof, in the form of Exhibit A-20 hereto,
representing the right to distributions as set forth herein.

               Class MV-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account


                                      24
<PAGE>

distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date) and (c) the Certificate Principal Balance of the Class MV-2
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 71.10% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 2 and Loan Group 3 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and
Loan Group 3 for such Distribution Date minus the Adjustable Rate OC Floor;
provided, however, that if the Class MV-2 Certificates are the only Class of
Adjustable Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MV-2 Certificates will be entitled to receive the entire
remaining aggregate Principal Distribution Amount for Loan Group 2 and Loan
Group 3 until the Certificate Principal Balance thereof is reduced to zero.

               Class MV-3 Certificate: Any Certificate designated as a "Class
MV-3 Certificate" on the face thereof, in the form of Exhibit A-21 hereto,
representing the right to distributions as set forth herein.

               Class MV-3 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date) and (d) the
Certificate Principal Balance of the Class MV-3 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 75.70% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor; provided, however, that if the Class MV-3
Certificates are the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MV-3 Certificates will be
entitled to receive the entire remaining aggregate Principal Distribution
Amount for Loan Group 2 and Loan Group 3 until the Certificate Principal
Balance thereof is reduced to zero.

               Class MV-4 Certificate: Any Certificate designated as a "Class
MV-4 Certificate" on the face thereof, in the form of Exhibit A-22 hereto,
representing the right to distributions as set forth herein.

               Class MV-4 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date), (d) the Certificate
Principal Balance of the Class MV-3 Certificates (after taking into account
distribution of the Class MV-3 Principal Distribution Amount on such
Distribution Date) and (e)



                                      25
<PAGE>

the Certificate Principal Balance of the Class MV-4 Certificates immediately
prior to such Distribution Date over (ii) the lesser of (x) 79.40% of the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and
Loan Group 3 for such Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 2 and Loan Group 3 for such
Distribution Date minus the Adjustable Rate OC Floor; provided, however, that
if the Class MV-4 Certificates are the only Class of Adjustable Rate
Subordinate Certificates outstanding on such Distribution Date, the Class MV-4
Certificates will be entitled to receive the entire remaining aggregate
Principal Distribution Amount for Loan Group 2 and Loan Group 3 until the
Certificate Principal Balance thereof is reduced to zero.

               Class MV-5 Certificate: Any Certificate designated as a "Class
MV-5 Certificate" on the face thereof, in the form of Exhibit A-23 hereto,
representing the right to distributions as set forth herein.

               Class MV-5 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date), (d) the Certificate
Principal Balance of the Class MV-3 Certificates (after taking into account
distribution of the Class MV-3 Principal Distribution Amount on such
Distribution Date), (e) the Certificate Principal Balance of the Class MV-4
Certificates (after taking into account distribution of the Class MV-4
Principal Distribution Amount on such Distribution Date) and (f) the
Certificate Principal Balance of the Class MV-5 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 82.50% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor; provided, however, that if the Class MV-5
Certificates are the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MV-5 Certificates will be
entitled to receive the entire remaining aggregate Principal Distribution
Amount for Loan Group 2 and Loan Group 3 until the Certificate Principal
Balance thereof is reduced to zero.

               Class MV-6 Certificate: Any Certificate designated as a "Class
MV-6 Certificate" on the face thereof, in the form of Exhibit A-24 hereto,
representing the right to distributions as set forth herein.

               Class MV-6 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account



                                      26
<PAGE>

distribution of the Class MV-2 Principal Distribution Amount on such
Distribution Date), (d) the Certificate Principal Balance of the Class MV-3
Certificates (after taking into account distribution of the Class MV-3
Principal Distribution Amount on such Distribution Date), (e) the Certificate
Principal Balance of the Class MV-4 Certificates (after taking into account
distribution of the Class MV-4 Principal Distribution Amount on such
Distribution Date), (f) the Certificate Principal Balance of the Class MV-5
Certificates (after taking into account distribution of the Class MV-5
Principal Distribution Amount on such Distribution Date) and (g) the
Certificate Principal Balance of the Class MV-6 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 86.20% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor; provided, however, that if the Class MV-6
Certificates are the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MV-6 Certificates will be
entitled to receive the entire remaining aggregate Principal Distribution
Amount for Loan Group 2 and Loan Group 3 until the Certificate Principal
Balance thereof is reduced to zero.

               Class MV-7 Certificate: Any Certificate designated as a "Class
MV-7 Certificate" on the face thereof, in the form of Exhibit A-25 hereto,
representing the right to distributions as set forth herein.

               Class MV-7 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date), (d) the Certificate
Principal Balance of the Class MV-3 Certificates (after taking into account
distribution of the Class MV-3 Principal Distribution Amount on such
Distribution Date), (e) the Certificate Principal Balance of the Class MV-4
Certificates (after taking into account distribution of the Class MV-4
Principal Distribution Amount on such Distribution Date), (f) the Certificate
Principal Balance of the Class MV-5 Certificates (after taking into account
distribution of the Class MV-5 Principal Distribution Amount on such
Distribution Date), (g) the Certificate Principal Balance of the Class MV-6
Certificates (after taking into account distribution of the Class MV-6
Principal Distribution Amount on such Distribution Date) and (h) the
Certificate Principal Balance of the Class MV-7 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 89.00% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor; provided, however, that if the Class MV-7
Certificates are the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MV-7 Certificates will be
entitled to receive the entire remaining aggregate Principal Distribution
Amount for Loan Group 2 and Loan Group 3 until the Certificate Principal
Balance thereof is reduced to zero.



                                      27
<PAGE>

               Class MV-8 Certificate: Any Certificate designated as a "Class
MV-8 Certificate" on the face thereof, in the form of Exhibit A-26 hereto,
representing the right to distributions as set forth herein.

               Class MV-8 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date), (d) the Certificate
Principal Balance of the Class MV-3 Certificates (after taking into account
distribution of the Class MV-3 Principal Distribution Amount on such
Distribution Date), (e) the Certificate Principal Balance of the Class MV-4
Certificates (after taking into account distribution of the Class MV-4
Principal Distribution Amount on such Distribution Date), (f) the Certificate
Principal Balance of the Class MV-5 Certificates (after taking into account
distribution of the Class MV-5 Principal Distribution Amount on such
Distribution Date), (g) the Certificate Principal Balance of the Class MV-6
Certificates (after taking into account distribution of the Class MV-6
Principal Distribution Amount on such Distribution Date), (h) the Certificate
Principal Balance of the Class MV-7 Certificates (after taking into account
distribution of the Class MV-7 Principal Distribution Amount on such
Distribution Date) and (i) the Certificate Principal Balance of the Class MV-8
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 91.40% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 2 and Loan Group 3 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and
Loan Group 3 for such Distribution Date minus the Adjustable Rate OC Floor;
provided, however, that if the Class MV-8 Certificates are the only Class of
Adjustable Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MV-8 Certificates will be entitled to receive the entire
remaining aggregate Principal Distribution Amount for Loan Group 2 and Loan
Group 3 until the Certificate Principal Balance thereof is reduced to zero.

               Class P Certificate: Any Class PF Certificate or Class PV
Certificate.

               Class PF Certificate: Any Certificate designated as a "Class PF
Certificate" on the face thereof, in the form of Exhibit B-1 hereto,
representing the right to distributions as set forth herein.

               Class PF Principal Distribution Date: The first Distribution
Date that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans in Loan Group 1 that have a Prepayment Charge Period.

               Class PV Certificate: Any Certificate designated as a "Class PV
Certificate" on the face thereof, in the form of Exhibit B-2 hereto,
representing the right to distributions as set forth herein.



                                      28
<PAGE>

               Class PV Principal Distribution Date: The first Distribution
Date that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans in Loan Group 2 and Loan Group 3 that have a Prepayment Charge
Period.

               Closing Date:  November 29, 2004.

               Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.

               Compensating Interest: With respect to the Mortgage Loans in
each Loan Group and any Distribution Date, an amount equal to the lesser of
(x) one-half of the Servicing Fee for such Mortgage Loans for the related Due
Period and (y) the aggregate Prepayment Interest Shortfalls for such Mortgage
Loans for such Distribution Date.

               Confirmation: Any of the Confirmations dated November 22, 2004
evidencing a transaction between the Corridor Contract Counterparty and CHL
relating to the Corridor Contracts.

               Corporate Trust Office: The designated office of the Trustee in
the State of New York where at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 101 Barclay Street,
New York, New York 10286 (Attention: Corporate Trust MBS Administration),
telephone: (212) 815-3236, facsimile: (212) 815-3986.

               Corridor Contract: The Class AF-1 Corridor Contract, the Class
1-AV-1 Corridor Contract, the Class 2-AV Corridor Contract or the Adjustable
Rate Subordinate Corridor Contract, as applicable.

               Corridor Contract Assignment Agreement: The Assignment
Agreement dated as of the Closing Date among CHL, the Trustee and the Corridor
Contract Counterparty, the form of which is attached hereto as Exhibit S.

               Corridor Contract Counterparty: Bear Stearns Financial Products
Inc. and its successors.

               Corridor Contract Termination Date: The Adjustable Rate
Subordinate Corridor Contract Termination Date, Class 1-AV-1 Corridor Contract
Termination Date, Class 2-AV Corridor Contract Termination Date and Class AF-1
Corridor Contract Termination Date, as applicable.

               Credit Bureau Risk Score: A statistical credit score obtained
by CHL in connection with the origination of a Mortgage Loan.

               Co-Trustee: The Bank of New York Trust Company, N.A., a
National Association, not in its individual capacity, but solely in its
capacity as co-trustee for the benefit of the Certificateholders under this
Agreement, and any successor thereto, and any corporation or national banking
association resulting from or surviving any consolidation or merger to which
it or its successors may be a party.



                                      29
<PAGE>

               Credit Comeback Excess Account: The separate Eligible Account
created and initially maintained by the Trustee pursuant to Section 4.09 in
the name of the Trustee for the benefit of the Certificateholders and
designated "The Bank of New York in trust for registered Holders of CWABS,
Inc., Asset-Backed Certificates, Series 2004-12". Funds in the Credit Comeback
Excess Account shall be held in trust for the Certificateholders for the uses
and purposes set forth in this Agreement.

               Credit Comeback Excess Cashflow: With respect to any
Distribution Date, any amounts in the Credit Comeback Excess Account available
for such Distribution Date.

               Credit Comeback Excess Amount: With respect to the Credit
Comeback Loans in Loan Group 1 and any Master Servicer Advance Date, the
portion of the sum of the following (without duplication) attributable to the
excess, if any, of the actual mortgage rate on each Credit Comeback Loan and
the Mortgage Rate on such Credit Comeback Loan: (i) all scheduled interest
collected during the related Due Period with respect to the Credit Comeback
Loans, (ii) all Advances relating to interest with respect to the Credit
Comeback Loans, (iii) all Compensating Interest with respect to the Credit
Comeback Loans and (iv) Liquidation Proceeds with respect to the Credit
Comeback Loans collected during the related Due Period (to the extent such
Liquidation Proceeds relate to interest), less all Nonrecoverable Advances
relating to interest reimbursed during the related Due Period.

               Credit Comeback Loan: Any Mortgage Loan for which the related
Mortgage Rate is subject to reduction (not exceeding 0.375% per annum) for
good payment history of Scheduled Payments by the related Mortgagor.

               Cross-Over Situation: With respect to any Distribution Date and
Loan Group 2 and Loan Group 3 (after taking into account principal
distributions on such Distribution Date), a Cross-Over Situation shall exist
(i) with respect to the R-2-A and R-2-B Interests, if the R-2-A and R-2-B
Interests are in the aggregate less than 1% of the Subordinate Component
Balance of Loan Group 2 and Loan Group 3.

               Current Interest: With respect to each Class of Interest
Bearing Certificates and each Distribution Date, the interest accrued at the
applicable Pass-Through Rate for the applicable Accrual Period on the
Certificate Principal Balance of such Class immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a
trustee in bankruptcy.

               Cut-off Date: In the case of any Mortgage Loan, the later of
(x) November 1, 2004 and (y) the date of origination of such Mortgage Loan.

               Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid principal balance thereof as of the close of business on the Cut-off
Date after application of all payments of principal due on or prior to the
Cut-off Date, whether or not received, and all Principal Prepayments received
on or prior to the Cut-off Date, but without giving effect to any installments
of principal received in respect of Due Dates after the Cut-off Date.

               DBRS:  Dominion Bond Rating Service, Inc. and its successors.



                                      30
<PAGE>

               Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.

               Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under such Mortgage Loan,
or any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.

               Definitive Certificates:  As defined in Section 5.06.

               Delay Delivery Mortgage Loans: The Mortgage Loans identified on
the schedule of Mortgage Loans hereto set forth on Exhibit F-2 hereof for
which all or a portion of a related Mortgage File is not delivered to the
Co-Trustee on or prior to the Closing Date. The Depositor shall deliver (or
cause delivery of) the Mortgage Files to the Co-Trustee: (A) with respect to
at least 50% of the Mortgage Loans, not later than the Closing Date, (B) with
respect to at least an additional 40% of the Mortgage Loans, not later than 20
days after the Closing Date, and (C) with respect to the remaining Mortgage
Loans, not later than thirty days after the Closing Date. To the extent that
Countrywide Home Loans, Inc. shall be in possession of any Mortgage Files with
respect to any Delay Delivery Mortgage Loan, until delivery to of such
Mortgage File to the Co-Trustee as provided in Section 2.01, Countrywide Home
Loans, Inc. shall hold such files as agent and in trust for the Co-Trustee.

               Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.

               Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms of such Mortgage Loan by the close
of business on the day such payment is scheduled to be due. A Mortgage Loan is
"30 days delinquent" if such payment has not been received by the close of
business on the corresponding day of the month immediately succeeding the
month in which such payment was due, or, if there is no such corresponding day
(e.g., as when a 30-day month follows a 31-day month in which a payment was
due on the 31st day of such month), then on the last day of such immediately
succeeding month. Similarly for "60 days delinquent," "90 days delinquent" and
so on.

               Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or, if not the foregoing, the Percentage Interest appearing on
the face thereof, as applicable.

               Depositor: CWABS, Inc., a Delaware corporation, or its
successor in interest.

               Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository



                                      31
<PAGE>

shall initially be the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York.

               Depository Agreement: With respect to the Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
O.

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

               Determination Date: With respect to any Distribution Date, the
15th day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.

               Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(c) in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-12". Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.

               Distribution Account Deposit Date: As to any Distribution Date,
1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.

               Distribution Date: The 25th day of each month, or if such day
is not a Business Day, on the first Business Day thereafter, commencing in
December 2004.

               Due Date: With respect to any Mortgage Loan and Due Period, the
due date for Scheduled Payments of interest and/or principal on that Mortgage
Loan occurring in such Due Period as provided in the related Mortgage Note.

               Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs and ending on the first day of the
month in which such Distribution Date occurs.

               Eligible Account: Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if Moody's is not a Rating Agency) are rated by each Rating
Agency in one of its two highest long-term and its highest short-term rating
categories respectively, at the time any amounts are held on deposit therein,
or (ii) an account or accounts in a depository institution or trust company in
which such accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to
each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account or a perfected first



                                      32
<PAGE>

priority security interest against any collateral (which shall be limited to
Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution or trust company
in which such account is maintained, or (iii) a trust account or accounts
maintained with the corporate trust department of a federal or state chartered
depository institution or trust company having capital and surplus of not less
than $50,000,000, acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies without reduction or withdrawal of their
then-current ratings of the Certificates (without regard to the Class 1-AV-1
Policy, in the case of the Class 1-AV-1 Certificates) as evidenced by a letter
from each Rating Agency to the Trustee. Eligible Accounts may bear interest,
and may include, if otherwise qualified under this definition, accounts
maintained with the Trustee.

               Eligible Repurchase Month: As defined in Section 3.12(d)
hereof.

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

               ERISA-Qualifying Underwriting: A best efforts or firm
commitment underwriting or private placement that meets the applicable
requirements of the Underwriter's Exemption.

               ERISA-Restricted Certificates: The Class A-R Certificates,
Class P Certificates, Class C Certificates and Certificates of any Class that
ceases to satisfy the applicable rating requirement under the Underwriter's
Exemption.

               Escrow Account:  As defined in Section 3.06.

               Event of Default: As defined in Section 7.01 hereof.

               Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the amount, if any, by which the sum of any Liquidation Proceeds and
Subsequent Recoveries are in excess of the sum of (i) the unpaid principal
balance of such Liquidated Mortgage Loan as of the date of liquidation of such
Liquidated Mortgage Loan plus (ii) interest at the Mortgage Rate from the Due
Date as to which interest was last paid or advanced to Certificateholders (and
not reimbursed to the Master Servicer) up to the Due Date in the month in
which Liquidation Proceeds are required to be distributed on the Stated
Principal Balance of such Liquidated Mortgage Loan outstanding during each Due
Period as to which such interest was not paid or advanced.

               Expense Fee Rate: With respect to any Mortgage Loan, the sum of
(i) the Servicing Fee Rate and (ii) the Trustee Fee Rate.

               Extra Principal Distribution Amount: With respect to any
Distribution Date and (A) Loan Group 1, the lesser of (1) the Fixed Rate
Overcollateralization Deficiency Amount and (2) the sum of the Fixed Rate Loan
Group Excess Cashflow and the Credit Comeback Excess Cashflow available for
payment thereof and (B) each of Loan Group 2 and Loan Group 3, the lesser of
(1) the Adjustable Rate Overcollateralization Deficiency Amount and (2) the
Adjustable Rate Loan Group Excess Cashflow available for payment thereof.



                                      33
<PAGE>

               Fannie Mae: The Federal National Mortgage Association, a
federally chartered and privately owned corporation organized and existing
under the Federal National Mortgage Association Charter Act, or any successor
thereto.

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

               Fiscal Agent: As defined in the Class 1-AV-1 Policy.

               Fixed Rate Certificates: The Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class MF-3, Class MF-4,
Class MF-5, Class MF-6, Class MF-7 and Class BF Certificates.

               Fixed Rate Cumulative Loss Trigger Event: With respect to a
Distribution Date on or after the Fixed Rate Stepdown Date, a Fixed Rate
Cumulative Loss Trigger Event occurs if (x) the aggregate amount of Realized
Losses on the Mortgage Loans in Loan Group 1 from (and including) the Cut-off
Date for each such Mortgage Loan to (and including) the last day of the
related Due Period (reduced by the aggregate amount of any Subsequent
Recoveries related to Loan Group 1 received through the last day of that Due
Period) exceeds (y) the applicable percentage, for such Distribution Date, of
the aggregate Cut-off Date Principal Balance of the Mortgage Loans in Loan
Group 1, as set forth below:

<TABLE>
<CAPTION>

           Distribution Date                           Percentage
           -----------------                           ----------
           <S>                                         <C>
           December 2007 -- November 2008............. 1.50% with respect to December
                                                       2007, plus an additional 1/12th of
                                                       1.00% for each month thereafter
                                                       through November 2008
           December 2008 -- November 2009............. 2.50% with respect to December
                                                       2008, plus an additional 1/12th of
                                                       1.00% for each month thereafter
                                                       through November 2009
           December 2009 -- November 2010............. 3.50% with respect to December
                                                       2009, plus an additional 1/12th of
                                                       0.50% for each month thereafter
                                                       through November 2010
           December 2010 and thereafter..............  4.00%
</TABLE>

               Fixed Rate Delinquency Trigger Event: With respect to any
Distribution Date on or after the Fixed Rate Stepdown Date, a Fixed Rate
Delinquency Trigger Event exists if the Rolling Sixty-Day Delinquency Rate for
Outstanding Mortgage Loans in Loan Group 1 equals or exceeds the product of
50.00% and the Fixed Rate Senior Enhancement Percentage for such Distribution
Date.

               Fixed Rate Loan Group Excess Cashflow: With respect to any
Distribution Date the sum of (i) the amount remaining after the distribution
of interest to Certificateholders for such Distribution Date pursuant to
Section 4.04(a)(ii)(i), and (ii) the amount remaining after the distribution
of principal to Certificateholders for such Distribution Date pursuant to
Section 4.04(c)(1)(J) or 4.04(c)(2)(J).



                                      34
<PAGE>

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

               Fixed Rate OC Floor: An amount equal to 0.50% of the aggregate
Cut-off Date Principal Balance of the Mortgage Loans in Loan Group 1.

               Fixed Rate Overcollateralization Deficiency Amount: With
respect to any Distribution Date, the amount, if any, by which the Fixed Rate
Overcollateralization Target Amount exceeds the Fixed Rate Overcollateralized
Amount on such Distribution Date (after giving effect to distributions in
respect of the Principal Remittance Amount for Loan Group 1 on such
Distribution Date).

               Fixed Rate Overcollateralization Target Amount: With respect to
any Distribution Date (a) prior to the Fixed Rate Stepdown Date, an amount
equal to 2.20% of the aggregate Cut-off Date Principal Balance of the Mortgage
Loans in Loan Group 1 and (b) on or after the Fixed Rate Stepdown Date, the
greater of (i) an amount equal to 4.40% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 for the current Distribution
Date and (ii) the Fixed Rate OC Floor; provided, however, that if a Fixed Rate
Trigger Event is in effect on any Distribution Date, the Fixed Rate
Overcollateralization Target Amount will be the Fixed Rate
Overcollateralization Target Amount as in effect for the prior Distribution
Date.

               Fixed Rate Overcollateralized Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1 for such Distribution
Date exceeds (y) the aggregate Certificate Principal Balance of the Class AF
Certificates and the Fixed Rate Subordinate Certificates as of such
Distribution Date (after giving effect to distributions of the Principal
Remittance Amount for Loan Group 1 to be made on such Distribution Date).

               Fixed Rate Senior Enhancement Percentage: With respect to a
Distribution Date on or after the Fixed Rate Stepdown Date, the fraction
(expressed as a percentage) (1) the numerator of which is the excess of (a)
the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1
for the preceding Distribution Date over (b) (i) before the Certificate
Principal Balances of the Class AF Certificates have been reduced to zero, the
sum of the Certificate Principal Balances of the Class AF Certificates, or
(ii) after such time, the Certificate Principal Balance of the most senior
Class of Fixed Rate Subordinate Certificates outstanding, as of the preceding
Master Servicer Advance Date, and (2) the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1 for
the preceding Distribution Date.

               Fixed Rate Stepdown Date: The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class AF Certificates is reduced to zero, and (ii) the later to occur of (x)
the Distribution Date in December 2007 and (y) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class AF Certificates
(after calculating anticipated distributions on such Distribution Date) is
less than or



                                      35
<PAGE>

equal to 68.80% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 1 for such Distribution Date.

               Fixed Rate Subordinate Certificates: The Class MF-1, Class
MF-2, Class MF-3, Class MF-4, Class MF-5, Class MF-6, Class MF-7 and Class BF
Certificates.

               Fixed Rate Subordinate Net Rate Cap: With respect to any
Distribution Date, the weighted average of the Adjusted Net Mortgage Rate of
the Mortgage Loans in Loan Group 1 for such Distribution Date.

               Fixed Rate Trigger Event: With respect to any Distribution Date
on or after the Fixed Rate Stepdown Date, consists of either a Fixed Rate
Delinquency Trigger Event with respect to that Distribution Date or a Fixed
Rate Cumulative Loss Trigger Event with respect to that Distribution Date.

               Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under
Title III of the Emergency Home Finance Act of 1970, as amended, or any
successor thereto.

               Gross Margin: The percentage set forth in the related Mortgage
Note for the Adjustable Rate Mortgage Loans to be added to the Index for use
in determining the Mortgage Rate on each Adjustment Date, and which is set
forth in the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.

               Group 1 Mortgage Loans: The group of Mortgage Loans identified
in the related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including
in each case any Mortgage Loans delivered in replacement thereof.

               Group 2 Mortgage Loans: The group of Mortgage Loans identified
in the related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including
in each case any Mortgage Loans delivered in replacement thereof.

               Group 3 Mortgage Loans: The group of Mortgage Loans identified
in the related Mortgage Loan Schedule as "Group 3 Mortgage Loans", including
in each case any Mortgage Loans delivered in replacement thereof.

               Index: As to any Adjustable Rate Mortgage Loan on any
Adjustment Date related thereto, the index for the adjustment of the Mortgage
Rate set forth as such in the related Mortgage Note, such index in general
being the average of the London interbank offered rates for six-month U.S.
dollar deposits in the London market, as set forth in The Wall Street Journal,
as most recently announced as of a date 45 days prior to such Adjustment Date
or, if the Index ceases to be published in The Wall Street Journal or becomes
unavailable for any reason, then the Index shall be a new index selected by
the Master Servicer, based on comparable information.

               Initial Adjustment Date: As to any Adjustable Rate Mortgage
Loan, the first Adjustment Date following the origination of such Mortgage
Loan.



                                      36
<PAGE>

               Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the Mortgage Loans due
after the Cut-off Date and received by the Master Servicer before the Closing
Date and not applied in computing the Cut-off Date Principal Balance thereof
and (ii) interest on the Mortgage Loans due after the Cut-off Date and
received by the Master Servicer before the Closing Date.

               Initial Certificate Principal Balance: With respect to any
Certificate (other than the Class C Certificates) the Certificate Principal
Balance of such Certificate or any predecessor Certificate on the Closing
Date.

               Initial Mortgage Rate: As to each Adjustable Mortgage Loan, the
Mortgage Rate in effect prior to the Initial Adjustment Date.

               Initial Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the percentage specified in the related Mortgage Note that
limits the permissible increase or decrease in the Mortgage Rate on its
initial Adjustment Date.

               Insolvency Proceeding: As defined in Section 4.06(h).

               Insurance Policy: With respect to any Mortgage Loan included in
the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect with respect to such Mortgage Loan, including any
replacement policy or policies for any Insurance Policy.

               Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans (other than by the Class 1-AV-1 Insurer under the Class 1-AV-1 Policy)
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed of trust and
are not applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account, in
each case other than any amount included in such Insurance Proceeds in respect
of Insured Expenses and received prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan.

               Insured Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.

               Insured Payment:  As defined in the Class 1-AV-1 Policy.

               Interest Bearing Certificates: The Fixed Rate Certificates and
the Adjustable Rate Certificates.

               Interest Carry Forward Amount: With respect to each Class of
Interest Bearing Certificates and each Distribution Date, the excess of (i)
the Current Interest for such Class with respect to prior Distribution Dates
over (ii) the amount actually distributed to such Class with respect to
interest on such prior Distribution Dates.

               Interest Determination Date: With respect to the first Accrual
Period for the Adjustable Rate Certificates, November 24, 2004. With respect
to any Accrual Period for the



                                      37
<PAGE>

Adjustable Rate Certificates thereafter, the second LIBOR Business Day
preceding the commencement of such Accrual Period.

               Interest Funds: With respect to any Distribution Date and Loan
Group, the Interest Remittance Amount for such Loan Group and Distribution
Date, less the portion of the Trustee Fee for such Distribution Date allocable
to such Loan Group.

               Interest Remittance Amount: With respect to the Mortgage Loans
in each Loan Group and any Master Servicer Advance Date, (x) the sum, without
duplication, of (i) all scheduled interest collected during the related Due
Period (for the avoidance of doubt, other than Credit Comeback Excess Amounts)
with respect to the related Mortgage Loans less the related Servicing Fee,
(ii) all interest on prepayments, other than Prepayment Interest Excess, (iii)
all related Advances relating to interest with respect to such Mortgage Loans,
(iv) all related Compensating Interest with respect to such Mortgage Loans,
(v) Liquidation Proceeds with respect to such Mortgage Loans collected during
the related Due Period (to the extent such Liquidation Proceeds relate to
interest) and (vi) the related Seller Shortfall Interest Requirement, less (y)
all reimbursements to the Master Servicer during the related Due Period for
Advances of interest previously made allocable to such Loan Group.

               Investment Letter:  As defined in Section 5.02(b).

               Last Scheduled Distribution Date: With respect to the Class
1-AV-1 Certificates and the Class 1-AV-1 Policy, the Distribution Date
occurring in May 2035.

               Latest Possible Maturity Date: The Distribution Date following
the third anniversary of the scheduled maturity date of the Mortgage Loan
having the latest scheduled maturity date as of the Cut-off Date.

               LIBOR Business Day: Any day on which banks in the City of
London, England and New York City, U.S.A. are open and conducting transactions
in foreign currency and exchange.

               Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan that has been liquidated through deed-in-lieu
of foreclosure, foreclosure sale, trustee's sale or other realization as
provided by applicable law governing the real property subject to the related
Mortgage and any security agreements and as to which the Master Servicer has
certified (in accordance with Section 3.12) in the related Prepayment Period
that it has received all amounts it expects to receive in connection with such
liquidation.

               Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property received in connection with or prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan, less the sum of related unreimbursed Advances,
Servicing Fees and Servicing Advances.



                                      38
<PAGE>


               Liquidity Trust: Countrywide LFT LLC a Delaware limited
liability company, and its successors and assigns.

               Liquidity Trust Mortgage Loans: The Mortgage Loans identified
as such on the Mortgage Loan Schedule for which the Liquidity Trust is the
applicable Seller.

               Loan Group:  Any of Loan Group 1, Loan Group 2 or Loan Group 3.

               Loan Group 1:  The Group 1 Mortgage Loans.

               Loan Group 2:  The Group 2 Mortgage Loans.

               Loan Group 3:  The Group 3 Mortgage Loans.

               Loan Group Net Rate Cap of the Related Loan Group: With respect
to Loan Group 1, the Loan Group 1 Net Rate Cap, with respect to Loan Group 2,
the Loan Group 2 Net Rate Cap and with respect to Loan Group 3, the Loan Group
3 Net Rate Cap.

               Loan-to-Value Ratio: The fraction, expressed as a percentage,
the numerator of which is the original principal balance of the related
Mortgage Loan and the denominator of which is the Appraised Value of the
related Mortgaged Property.

               Majority Holder: The Holders of Certificates evidencing at
least 51% of the Voting Rights allocated to such Class of Certificates.

               Margin: With respect to any Accrual Period and Class of
Adjustable Rate Certificates, the per annum rate indicated in the following
table:

               ------------------------------------ ------------ --------------
                              Class                 Margin (1)    Margin (2)
               ------------------------------------ ------------ --------------
               Class AF-1.......................      0.200%        0.200%
               ------------------------------------ ------------ --------------
               Class 1-AV-1.....................      0.310%        0.620%
               ------------------------------------ ------------ --------------
               Class 2-AV-1.....................      0.150%        0.300%
               ------------------------------------ ------------ --------------
               Class 2-AV-2.....................      0.280%        0.560%
               ------------------------------------ ------------ --------------
               Class 2-AV-3.....................      0.460%        0.920%
               ------------------------------------ ------------ --------------
               Class MV-1.......................      0.600%        0.900%
               ------------------------------------ ------------ --------------
               Class MV-2.......................      0.630%        0.945%
               ------------------------------------ ------------ --------------
               Class MV-3.......................      0.660%        0.990%
               ------------------------------------ ------------ --------------
               Class MV-4.......................      0.950%        1.425%
               ------------------------------------ ------------ --------------
               Class MV-5.......................      1.000%        1.500%
               ------------------------------------ ------------ --------------
               Class MV-6.......................      1.200%        1.800%
               ------------------------------------ ------------ --------------
               Class MV-7.......................      1.700%        2.550%
               ------------------------------------ ------------ --------------
               Class MV-8.......................      1.800%        2.700%
               ------------------------------------ ------------ --------------
               Class BV.........................      3.000%        4.500%
               ------------------------------------ ------------ --------------

(1)     For any Accrual Period relating to any Distribution Date occurring on
        or prior to the Optional Termination Date.
(2)     For any Accrual Period relating to any Distribution Date occurring
        after the Optional Termination Date.



                                      39
<PAGE>

               Master Servicer: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its capacity as master
servicer hereunder.

               Master Servicer Advance Date: As to any Distribution Date, the
Business Day immediately preceding such Distribution Date.

               Master Servicer Prepayment Charge Payment Amount: The amounts
(i) payable by the Master Servicer in respect of any Prepayment Charges waived
other than in accordance with the standard set forth in the first sentence of
Section 3.20(a), or (ii) collected from the Master Servicer in respect of a
remedy for the breach of the representation made by CHL set forth in Section
3.20(c).

               Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note.

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

               MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS(R) System.

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

               MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.

               Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the minimum rate of interest set forth as such in the related
Mortgage Note.

               Modified Mortgage Loan:  As defined in Section 3.12(a).

               MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.

               Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.05.

               Moody's:  Moody's Investors Service, Inc. and its successors.

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

               Mortgage File: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Co-Trustee to be added to the Mortgage File pursuant to this
Agreement.



                                      40
<PAGE>

               Mortgage Loan Schedule: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the deletion of
Liquidated Mortgage Loans and Deleted Mortgage Loans and the addition of
Replacement Mortgage Loans pursuant to the provisions of this Agreement
transferred to the Trustee as part of the Trust Fund and from time to time
subject to this Agreement, attached hereto as Exhibit F-1, setting forth in
the following information with respect to each Mortgage Loan:

                      (i) the loan number;

                      (ii) the Loan Group;

                      (iii) the Appraised Value;

                      (iv) the Initial Mortgage Rate;

                      (v) the maturity date;

                      (vi) the original principal balance;

                      (vii) the Cut-off Date Principal Balance;

                      (viii) the first payment date of the Mortgage Loan;

                      (ix) the Scheduled Payment in effect as of the Cut-off
               Date;

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

                      (xi) a code indicating whether the residential dwelling
               at the time of origination was represented to be
               owner-occupied;

                      (xii) a code indicating whether the residential dwelling
               is either (a) a detached single-family dwelling, (b) a
               two-family residential property, (c) a three-family residential
               property, (d) a four-family residential property, (e) planned
               unit development, (f) a low-rise condominium unit, (g) a
               high-rise condominium unit or (h) manufactured housing;

                      (xiii) a code indicating whether such Mortgage Loan is a
               Credit Comeback Loan;

                      (xiv) [Reserved];

                      (xv) [Reserved];

                      (xvi) the purpose of the Mortgage Loan;

                      (xvii) with respect to each Adjustable Rate Mortgage
               Loan:

                      (a)    the frequency of each Adjustment Date;


                                      41
<PAGE>

                      (b)    the next Adjustment Date;

                      (c)    the Maximum Mortgage Rate;

                      (d)    the Minimum Mortgage Rate;

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

                      (f)    the related Initial Periodic Rate Cap and
                             Subsequent Periodic Rate Cap;

                      (g)    a code indicating whether the Mortgage Loan is a
                             CHL Mortgage Loan or a Liquidity Trust Mortgage
                             Loan; and

                      (h)    the Gross Margin;

                      (xviii)[Reserved];

                      (xix) the premium rate for any lender-paid mortgage
               insurance, if applicable; and

                      (xx) a code indicating whether the Mortgage Loan is a
               Fixed Rate Mortgage Loan or an Adjustable Rate Mortgage Loan.

Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans and for each Loan Group.
               Mortgage Loans: Such of the Group 1 Mortgage Loans, Group 2
Mortgage Loans and Group 3 Mortgage Loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as
part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
Any mortgage loan that was intended by the parties hereto to be transferred to
the Trust Fund as indicated by such Mortgage Loan Schedule which is in fact
not so transferred for any reason, including a breach of the representation
contained in Section 2.02 hereof, shall continue to be a Mortgage Loan
hereunder until the Purchase Price with respect thereto has been paid to the
Trust Fund.

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

               Mortgage Pool: The aggregate of the Mortgage Loans identified
in the Mortgage Loan Schedule.

               Mortgage Rate: The annual rate of interest borne by a Mortgage
Note from time to time; provided, however, the Mortgage Rate for each Credit
Comeback Loan shall be treated for all purposes of payments on the
Certificates, including the calculation of the Pass-Through Rates and the Net
Rate Cap, as reduced by 0.375% on the Due Date following the end of each of
the first four annual periods after the origination date, irrespective of
whether the Mortgagor qualifies for the reduction by having a good payment
history.



                                      42
<PAGE>

               Mortgaged Property: The underlying property securing a Mortgage
Loan.

               Mortgagor:  The obligors on a Mortgage Note.

               NAS Factor: For any Distribution Date set forth below, the
percentage set forth in the following table:

     Distribution Date                                               Percentage
     -----------------                                               ----------
     December 2004 - November 2007.............................          0%
     December 2007 - November 2009.............................         45%
     December 2009 - November 2010.............................         80%
     December 2010 - November 2011.............................         100%
     December 2011 and thereafter..............................         300%

               NAS Principal Distribution Amount: For any Distribution Date,
an amount equal to the product of (i) the Class AF-6 Portion for such
Distribution Date, (ii) any amounts distributed to the Class AF Certificates
pursuant to Section 4.04(c) and 4.04(e)(1) for such Distribution Date and
(iii) the NAS Factor for such Distribution Date.

               Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.

               Net Rate Cap: (i) With respect to each Class of Class AF
Certificates, the Class AF Net Rate Cap, (ii) with respect to the Class 1-AV-1
Certificates, the Class 1-AV-1 Net Rate Cap, (iii) with respect to each Class
of Class 2-AV Certificates, the Class 2-AV Net Rate Cap, (iv) with respect to
each Class of Fixed Rate Subordinate Certificates, the Fixed Rate Subordinate
Net Rate Cap and (v) with respect to each Class of Adjustable Rate Subordinate
Certificates, the Adjustable Rate Subordinate Net Rate Cap.

               Net Rate Carryover: With respect to any Class of Interest
Bearing Certificates and any Distribution Date, the sum of (A) the excess of
(i) the amount of interest that such Class would otherwise have accrued for
such Distribution Date had the Pass-Through Rate for such Class and the
related Accrual Period not been determined based on the applicable Net Rate
Cap, over (ii) the amount of interest accrued on such Class at the applicable
Net Rate Cap for such Distribution Date and (B) the Net Rate Carryover for
such Class for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the then-applicable
Pass-Through Rate for such Class, without giving effect to the applicable Net
Rate Cap.

               NIM Insurer: Any insurer guarantying at the request of CHL
certain payments under notes backed or secured by the Class C or Class P
Certificates.

               Nonrecoverable Advance: Any portion of an Advance previously
made or proposed to be made by the Master Servicer that, in the good faith
judgment of the Master Servicer, will not or, in the case of a current
delinquency, would not, be ultimately recoverable by the Master Servicer from
the related Mortgagor, related Liquidation Proceeds or otherwise.



                                      43
<PAGE>

               Non-United States Person : A Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration
of the trust and one or more United States persons have authority to control
all substantial decisions of the trustor.

               Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman of the
Board, the President, a Managing Director, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the Depositor,
(ii) in the case of the Master Servicer, signed by the President, an Executive
Vice President, a Vice President, an Assistant Vice President, the Treasurer,
or one of the Assistant Treasurers or Assistant Secretaries of Countrywide GP,
Inc., its general partner or (iii) if provided for in this Agreement, signed
by a Servicing Officer, as the case may be, and delivered to the Depositor and
the Trustee, as the case may be, as required by this Agreement.

               One-Month LIBOR: With respect to any Accrual Period for the
Adjustable Rate Certificates, the rate determined by the Trustee on the
related Interest Determination Date on the basis of the rate for U.S. dollar
deposits for one month that appears on Telerate Screen Page 3750 as of 11:00
a.m. (London time) on such Interest Determination Date; provided that the
parties hereto acknowledge that One-Month LIBOR calculated for the first
Accrual Period for the Adjustable Rate Certificates shall equal 2.18063% per
annum. If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying One-Month LIBOR or comparable rates as may
be reasonably selected by the Trustee), One-Month LIBOR for the applicable
Accrual Period for the Adjustable Rate Certificates will be the Reference Bank
Rate. If no such quotations can be obtained by the Trustee and no Reference
Bank Rate is available, One-Month LIBOR will be One-Month LIBOR applicable to
the preceding Accrual Period for the Adjustable Rate Certificates.

               Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to
each addressee of such opinion; provided that with respect to Section 6.04 or
10.01, or the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Depositor and the Master
Servicer, (ii) not have any direct financial interest in the Depositor or the
Master Servicer or in any affiliate of either and (iii) not be connected with
the Depositor or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.

               Optional Termination: The termination of the Trust Fund
provided hereunder pursuant to the purchase of the Mortgage Loans pursuant to
the last sentence of Section 9.01 hereof.



                                      44
<PAGE>

               Optional Termination Date: The first Distribution Date on which
the aggregate Stated Principal Balance of the Mortgage Loans is less than or
equal to 10% of the aggregate Cut-off Date Principal Balance of the Mortgage
Loans.

               Original Value: The value of the property underlying a Mortgage
Loan based, in the case of the purchase of the underlying Mortgaged Property,
on the lower of an appraisal satisfactory to the Master Servicer or the sales
price of such property or, in the case of a refinancing, on an appraisal
satisfactory to the Master Servicer.

               OTS:  The Office of Thrift Supervision.

               Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:

                      (i) Certificates theretofore canceled by the Trustee or
               delivered to the Trustee for cancellation; and

                      (ii) Certificates in exchange for which or in lieu of
               which other Certificates have been executed and delivered by
               the Trustee pursuant to this Agreement.

               Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not
the subject of a Principal Prepayment in full, and that did not become a
Liquidated Mortgage Loan, prior to the end of the related Prepayment Period.

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

               Pass-Through Rate: With respect to any Accrual Period and each
Class of Adjustable Rate Certificates the lesser of (x) One-Month LIBOR for
such Accrual Period plus the Margin for such Class and Accrual Period and (y)
the applicable Net Rate Cap for such Class and the related Distribution Date.
With respect to any Accrual Period and each Class of Fixed Rate Certificates,
the lesser of (x) the per annum rate set forth in the following table for such
Class and Accrual Period and (y) the applicable Net Rate Cap for such Class
and the related Distribution Date.



                                      45
<PAGE>

       ------------------------------- -------------------- -------------------
                                        Pass-Through Rate   Pass-Through Rate
                   Class                       (1)                 (2)
       ------------------------------- -------------------- -------------------
                    AF-2                     3.631%               3.631%
       ------------------------------- -------------------- -------------------
                    AF-3                     4.022%               4.022%
       ------------------------------- -------------------- -------------------
                    AF-4                     4.622%               4.622%
       ------------------------------- -------------------- -------------------
                    AF-5                     5.176%               5.676%
       ------------------------------- -------------------- -------------------
                    AF-6                     4.634%               4.634%
       ------------------------------- -------------------- -------------------
                    MF-1                     5.227%               5.227%
       ------------------------------- -------------------- -------------------
                    MF-2                     5.406%               5.406%
       ------------------------------- -------------------- -------------------
                    MF-3                     5.605%               5.605%
       ------------------------------- -------------------- -------------------
                    MF-4                     5.704%               5.704%
       ------------------------------- -------------------- -------------------
                    MF-5                     5.803%               5.803%
       ------------------------------- -------------------- -------------------
                    MF-6                     6.001%               6.001%
       ------------------------------- -------------------- -------------------
                    MF-7                     6.100%               6.100%
       ------------------------------- -------------------- -------------------
                     BF                      6.100%               6.100%
       ------------------------------- -------------------- -------------------

 (1)    For any Accrual Period relating to any Distribution Date occurring on
        or prior to the Optional Termination Date.
 (2)    For any Accrual Period relating to any Distribution Date occurring
        after the Optional Termination Date.

               Percentage Interest: With respect to any Interest Bearing
Certificate, a fraction, expressed as a percentage, the numerator of which is
the Certificate Principal Balance represented by such Certificate and the
denominator of which is the aggregate Certificate Principal Balance of the
related Class. With respect to the Class C, Class P and Class A-R
Certificates, the portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate.

               Permitted Investments: At any time, any one or more of the
following obligations and securities:

                      (i) obligations of the United States or any agency
               thereof, provided such obligations are backed by the full faith
               and credit of the United States;

                      (ii) general obligations of or obligations guaranteed by
               any state of the United States or the District of Columbia
               receiving the highest long-term debt rating of each Rating
               Agency, or such lower rating as each Rating Agency has
               confirmed in writing is sufficient for the ratings originally
               assigned to the Certificates by such Rating Agency (without
               regard to the Class 1-AV-1 Policy, in the case of the Class
               1-AV-1 Certificates);

                      (iii) commercial or finance company paper which is then
               receiving the highest commercial or finance company paper
               rating of each Rating Agency, or such lower rating as each
               Rating Agency has confirmed in writing is sufficient for the
               ratings originally assigned to the Certificates by such Rating
               Agency (without regard to the Class 1-AV-1 Policy, in the case
               of the Class 1-AV-1 Certificates);



                                      46
<PAGE>

                      (iv) certificates of deposit, demand or time deposits,
               or bankers' acceptances issued by any depository institution or
               trust company incorporated under the laws of the United States
               or of any state thereof and subject to supervision and
               examination by federal and/or state banking authorities,
               provided that the commercial paper and/or long term unsecured
               debt obligations of such depository institution or trust
               company (or in the case of the principal depository institution
               in a holding company system, the commercial paper or long-term
               unsecured debt obligations of such holding company, but only if
               Moody's is not a Rating Agency) are then rated one of the two
               highest long-term and the highest short-term ratings of each
               such Rating Agency for such securities, or such lower ratings
               as each Rating Agency has confirmed in writing is sufficient
               for the ratings originally assigned to the Certificates by such
               Rating Agency (without regard to the Class 1-AV-1 Policy, in
               the case of the Class 1-AV-1 Certificates);

                      (v) repurchase obligations with respect to any security
               described in clauses (i) and (ii) above, in either case entered
               into with a depository institution or trust company (acting as
               principal) described in clause (iv) above;

                      (vi) securities (other than stripped bonds, stripped
               coupons or instruments sold at a purchase price in excess of
               115% of the face amount thereof) bearing interest or sold at a
               discount issued by any corporation incorporated under the laws
               of the United States or any state thereof which, at the time of
               such investment, have one of the two highest long term ratings
               of each Rating Agency (except (x) if the Rating Agency is
               Moody's, such rating shall be the highest commercial paper
               rating of S&P for any such securities) and (y), or such lower
               rating as each Rating Agency has confirmed in writing is
               sufficient for the ratings originally assigned to the
               Certificates by such Rating Agency (without regard to the Class
               1-AV-1 Policy, in the case of the Class 1-AV-1 Certificates);

                      (vii) interests in any money market fund which at the
               date of acquisition of the interests in such fund and
               throughout the time such interests are held in such fund has
               the highest applicable long term rating by each Rating Agency
               or such lower rating as each Rating Agency has confirmed in
               writing is sufficient for the ratings originally assigned to
               the Certificates by such Rating Agency (without regard to the
               Class 1-AV-1 Policy, in the case of the Class 1-AV-1
               Certificates);

                      (viii) short term investment funds sponsored by any
               trust company or national banking association incorporated
               under the laws of the United States or any state thereof which
               on the date of acquisition has been rated by each Rating Agency
               in their respective highest applicable rating category or such
               lower rating as each Rating Agency has confirmed in writing is
               sufficient for the ratings originally assigned to the
               Certificates by such Rating Agency (without regard to the Class
               1-AV-1 Policy, in the case of the Class 1-AV-1 Certificates);
               and

                      (ix) such other relatively risk free investments having
               a specified stated maturity and bearing interest or sold at a
               discount acceptable to each Rating Agency as will not result in
               the downgrading or withdrawal of the rating then



                                      47
<PAGE>

               assigned to the Certificates by any Rating Agency (without
               regard to the Class 1-AV-1 Policy, in the case of the Class
               1-AV-1 Certificates), as evidenced by a signed writing
               delivered by each Rating Agency, and reasonably acceptable to
               the NIM Insurer, as evidenced by a signed writing delivered by
               the NIM Insurer;

provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no
such instrument shall be a Permitted Investment (A) if such instrument
evidences principal and interest payments derived from obligations underlying
such instrument and the interest payments with respect to such instrument
provide a yield to maturity of greater than 120% of the yield to maturity at
par of such underlying obligations, or (B) if it may be redeemed at a price
below the purchase price (the foregoing clause (B) not to apply to investments
in units of money market funds pursuant to clause (vii) above); provided
further that no amount beneficially owned by any REMIC (including, without
limitation, any amounts collected by the Master Servicer but not yet deposited
in the Certificate Account) may be invested in investments (other than money
market funds) treated as equity interests for Federal income tax purposes,
unless the Master Servicer shall receive an Opinion of Counsel, at the expense
of Master Servicer, to the effect that such investment will not adversely
affect the status of any such REMIC as a REMIC under the Code or result in
imposition of a tax on any such REMIC. Permitted Investments that are subject
to prepayment or call may not be purchased at a price in excess of par.

               Permitted Transferee: Any Person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives
described in section 521 of the Code) that is exempt from tax imposed by
Chapter 1 of the Code (including the tax imposed by section 511 of the Code on
unrelated business taxable income) on any excess inclusions (as defined in
section 860E(c)(1) of the Code) with respect to any Class A-R Certificate,
(iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) an "electing large partnership" as defined in
section 775 of the Code, (vi) a Person that is not a citizen or resident of
the United States, a corporation, partnership, or other entity (treated as a
corporation or a partnership for federal income tax purposes) created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia, or an estate whose income from sources without the
United States is includible in gross income for United States federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States Persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC formed hereunder to fail to
qualify as a REMIC at any time that any Certificates are Outstanding. The
terms "United States," "State" and "International Organization" shall have the
meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or
of any State or political subdivision



                                      48
<PAGE>

thereof for these purposes if all of its activities are subject to tax and,
with the exception of the Federal Home Loan Mortgage Corporation, a majority
of its board of directors is not selected by such government unit.

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

               Pool Stated Principal Balance: The aggregate of the Stated
Principal Balances of the Mortgage Loans which were Outstanding Mortgage
Loans.

               Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Certificates.

               Prepayment Charge: With respect to any Mortgage Loan, the
charges or premiums, if any, due in connection with a full or partial
prepayment of such Mortgage Loan within the related Prepayment Charge Period
in accordance with the terms thereof (other than any Master Servicer
Prepayment Charge Payment Amount).

               Prepayment Charge Period: With respect to any to any Mortgage
Loan, the period of time during which a Prepayment Charge may be imposed.

               Prepayment Charge Schedule: As of the Cut-off Date with respect
to each Mortgage Loan, a list attached hereto as Schedule I (including the
Prepayment Charge Summary attached thereto), setting forth the following
information with respect to each Prepayment Charge:

                      (i) the Mortgage Loan identifying number;

                      (ii) a code indicating the type of Prepayment Charge;

                      (iii) the state of origination of the related Mortgage
               Loan;

                      (iv) the date on which the first monthly payment was due
               on the related Mortgage Loan;

                      (v) the term of the related Prepayment Charge; and

                      (vi) the principal balance of the related Mortgage Loan
               as of the Cut-off Date.

               As of the Closing Date, the Prepayment Charge Schedule shall
contain the necessary information for each Mortgage Loan. The Prepayment
Charge Schedule shall be amended from time to time by the Master Servicer in
accordance with the provisions of this Agreement and a copy of each related
amendment shall be furnished by the Master Servicer to the Class P and Class C
Certificateholders and the NIM Insurer.



                                      49
<PAGE>

               Prepayment Interest Excess: With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment
during the period from the related Due Date to the end of the related
Prepayment Period, any payment of interest received in connection therewith
(net of any applicable Servicing Fee) representing interest accrued for any
portion of such month of receipt.

               Prepayment Interest Shortfall: With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a partial Principal
Prepayment or a Principal Prepayment in full during the period from the
beginning of the related Prepayment Period to the Due Date in such Prepayment
Period (other than a Principal Prepayment in full resulting from the purchase
of a Mortgage Loan pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof)
and for each Mortgage Loan that became a Liquidated Mortgage Loan during the
related Due Period, the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment (or liquidation) or in the
case of a partial Principal Prepayment on the amount of such prepayment (or
Liquidation Proceeds) exceeds (ii) the amount of interest paid or collected in
connection with such Principal Prepayment or such Liquidation Proceeds.

               Prepayment Period: As to any Distribution Date and related Due
Date, the period beginning with the opening of business on the sixteenth day
of the calendar month preceding the month in which such Distribution Date
occurs (or, with respect to the first Distribution Date, the period beginning
on November 1, 2004) and ending on the close of business on the fifteenth day
of the month in which such Distribution Date occurs.

               Prime Rate: The prime commercial lending rate of The Bank of
New York, as publicly announced to be in effect from time to time. The Prime
Rate shall be adjusted automatically, without notice, on the effective date of
any change in such prime commercial lending rate. The Prime Rate is not
necessarily The Bank of New York's lowest rate of interest.

               Principal Distribution Amount: With respect to each
Distribution Date and a Loan Group, the sum of (i) the Principal Remittance
Amount for such Loan Group for such Distribution Date and (ii) the Extra
Principal Distribution Amount for such Loan Group for such Distribution Date.

               Principal Prepayment: Any Mortgagor payment or other recovery
of (or proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01
hereof) that is received in advance of its scheduled Due Date to the extent it
is not accompanied by an amount as to interest representing scheduled interest
due on any date or dates in any month or months subsequent to the month of
prepayment. Partial Principal Prepayments shall be applied by the Master
Servicer in accordance with the terms of the related Mortgage Note.

               Principal Relocation Payment: In the case of the Variable Loan
Groups and Variable Interests only, a payment from any Loan Group to a REMIC 2
Interest other than a Regular Interest corresponding to that Loan Group as
provided in the Preliminary Statement. Principal Relocation Payments shall be
made of principal allocations comprising the Principal



                                      50
<PAGE>

Remittance Amount from a Loan Group and shall include a proportionate
allocation of Realized Losses from the Mortgage Loans of such Loan Group.

               Principal Remittance Amount: With respect to the Mortgage Loans
in each Loan Group and any Distribution Date, (a) the sum, without
duplication, of: (i) the scheduled principal collected with respect to the
Mortgage Loans during the related Due Period or advanced on or before 1:00
p.m. Pacific time on the related Master Servicer Advance Date, (ii) Principal
Prepayments collected in the related Prepayment Period, with respect to the
Mortgage Loans, (iii) the Stated Principal Balance of each Mortgage Loan that
was repurchased by a Seller or purchased by the Master Servicer with respect
to such Distribution Date, (iv) the amount, if any, by which the aggregate
unpaid principal balance of any Replacement Mortgage Loans is less than the
aggregate unpaid principal balance of any Deleted Mortgage Loans delivered by
the Sellers in connection with a substitution of a Mortgage Loan and (v) all
Liquidation Proceeds (to the extent such Liquidation Proceeds related to
principal) and Subsequent Recoveries collected during the related Due Period;
less (b) all Nonrecoverable Advances relating to principal and certain
expenses reimbursable pursuant to Section 6.03 and reimbursed during the
related Due Period.

               Principal Reserve Fund: The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 3.08 in the name
of the Trustee for the benefit of the Certificateholders and designated "The
Bank of New York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-12". Funds in the Principal Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.

               Private Certificates: The Class C and Class P Certificates.

               Prospectus: The prospectus dated October 25, 2004, relating to
mortgage pass-through certificates to be sold by the Depositor.

               Prospectus Supplement: The prospectus supplement dated November
15, 2004, relating to the public offering of the certain Classes of
Certificates offered thereby.

               PTCE 95-60:  As defined in Section 5.02(b).

               PUD: A Planned Unit Development.

               Purchase Price: With respect to any Mortgage Loan (x) required
to be (1) repurchased by a Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased
by the Depositor pursuant to Section 2.04 hereof, or (y) that the Master
Servicer has a right to purchase pursuant to Section 3.12 hereof, an amount
equal to the sum of (i) 100% of the unpaid principal balance (or, if such
purchase or repurchase, as the case may be, is effected by the Master
Servicer, the Stated Principal Balance) of the Mortgage Loan as of the date of
such purchase and (ii) accrued interest thereon at the applicable Mortgage
Rate (or, if such purchase or repurchase, as the case may be, is effected by
the Master Servicer, at the Net Mortgage Rate) from (a) the date through which
interest was last paid by the Mortgagor (or, if such purchase or repurchase,
as the case may be, is effected by the Master Servicer, the date through which
interest was last advanced and not reimbursed by the Master



                                      51
<PAGE>

Servicer) to (b) the Due Date in the month in which the Purchase Price is to
be distributed to Certificateholders and (iii) any costs, expenses and damages
incurred by the Trust Fund resulting from any violation of any predatory or
abusive lending law in connection with such Mortgage Loan.

               Rating Agency: Each of Moody's, DBRS and S&P. If any such
organization or its successor is no longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization, or other
comparable Person, designated by the Depositor, notice of which designation
shall be given to the Trustee. References herein to a given rating category of
a Rating Agency shall mean such rating category without giving effect to any
modifiers.

               Realized Loss: With respect to each Liquidated Mortgage Loan,
an amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of such Liquidated Mortgage Loan as of the date of such
liquidation, minus (ii) the Liquidation Proceeds, if any, received in
connection with such liquidation during the month in which such liquidation
occurs, to the extent applied as recoveries of principal of the Liquidated
Mortgage Loan. With respect to each Mortgage Loan that has become the subject
of a Deficient Valuation, (i) if the value of the related Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, the
amount by which the value of the Mortgaged Property was reduced below the
principal balance of the related Mortgage Note, and (ii) if the principal
amount due under the related Mortgage Note has been reduced, the difference
between the principal balance of the Mortgage Loan outstanding immediately
prior to such Deficient Valuation and the principal balance of the Mortgage
Loan as reduced by the Deficient Valuation. With respect to each Mortgage Loan
that has become the subject of a Debt Service Reduction and any Distribution
Date, the amount, if any, by which the related Scheduled Payment was reduced.

               Record Date: With respect to any Distribution Date and the
Adjustable Rate Certificates, the Business Day immediately preceding such
Distribution Date, or if such Certificates are no longer Book-Entry
Certificates, the last Business Day of the month preceding the month of such
Distribution Date. With respect to the Fixed Rate Certificates and the Class
A-R, Class C and Class P Certificates, the last Business Day of the month
preceding the month of a Distribution Date.

               Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple
of 0.03125%) of the offered rates for United States dollar deposits for one
month that are quoted by the Reference Banks as of 11:00 a.m., New York City
time, on the related Interest Determination Date to prime banks in the London
interbank market for a period of one month in amounts approximately equal to
the outstanding aggregate Certificate Principal Balance of the Adjustable Rate
Certificates on such Interest Determination Date, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates
appear, the Reference Bank Rate will be the arithmetic mean (rounded upwards,
if necessary, to the nearest whole multiple of 0.03125%) of the rates quoted
by one or more major banks in New York City, selected by the Trustee, as of
11:00 a.m., New York City time, on such date for loans in U.S. dollars to
leading European banks for a period of one month in amounts approximately
equal to the aggregate Certificate Principal Balance of the Adjustable Rate
Certificates on such Interest Determination Date.



                                      52
<PAGE>

               Reference Banks: Barclays Bank PLC, Deutsche Bank and NatWest,
N.A., provided that if any of the foregoing banks are not suitable to serve as
a Reference Bank, then any leading banks selected by the Trustee which are
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) not controlling, under the control of or under common control
with the Depositor, CHL or the Master Servicer and (iii) which have been
designated as such by the Trustee.

               Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.

               Regular Certificate: Any Certificate other than the Class A-R
Certificates.

               Relief Act:  The Servicemembers Civil Relief Act.

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

               Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM Insurer in accordance with Section 4.04.

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

               Replacement Mortgage Loan: A Mortgage Loan substituted by a
Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for File Release, (i) have a Stated
Principal Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not less than
90% of the Stated Principal Balance of the Deleted Mortgage Loan; (ii) with
respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than or
no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (a) have
a Maximum Mortgage Rate no more than 1% per annum higher or lower than the
Maximum Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum
Mortgage Rate no more than 1% per annum higher or lower than the Minimum
Mortgage Rate of the Deleted Mortgage Loan; (c) have the same Index, Initial
Periodic Rate Cap, Subsequent Periodic Rate Cap and intervals between
Adjustment Dates as that of the Deleted Mortgage Loan; and (d) have a Gross
Margin not more than 1% per annum higher or lower than that of the Deleted
Mortgage Loan; (iii) have the same or higher credit quality characteristics
than that of the Deleted Mortgage Loan; (iv) be accruing interest at a rate
not more than 1% per annum higher or lower than that of the Deleted Mortgage
Loan; (v) have a Loan-to-Value Ratio no higher than that of the Deleted
Mortgage Loan; (vi) have a remaining term to maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage Loan; (vii) not
permit conversion of the Mortgage Rate from a fixed rate to a variable rate or
vice versa; (viii) provide for a Prepayment Charge on terms substantially
similar to those of the Prepayment Charge, if any, of the Deleted Mortgage
Loan; (ix) constitute the same occupancy type and lien



                                      53
<PAGE>

priority as the Deleted Mortgage Loan; and (x) comply with each representation
and warranty set forth in Section 2.03 as of the date of substitution;
provided, however, that in the event that Seller is substituting more than one
proposed Replacement Mortgage Loan for more than one Deleted Mortgage Loan,
then such proposed Replacement Mortgage Loans need only satisfy clauses (i)
through (vi), (viii) and (ix) of this definition on a weighted average basis;
and provided further, however, that notwithstanding the foregoing, to the
extent that compliance with clause (x) of this definition would cause a
proposed Replacement Mortgage Loan to fail to comply with one or more of
clauses (i), (ii), (iv), (viii) and/or (ix) of this definition, then such
proposed Replacement Mortgage Loan must comply with clause (x) and need not
comply with clause (i), (ii), (iv) and/or (ix), as the case may be in order to
qualify as a Replacement Mortgage Loan.

               Representing Party:  As defined in Section 2.03(d).

               Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Co-Trustee, substantially in the form
of Exhibit M.

               Request for File Release: A Request for File Release submitted
by the Master Servicer to the Co-Trustee, substantially in the form of Exhibit
N.

               Required Distributions:  As defined in the Class 1-AV-1 Policy.

               Required Insurance Policy: With respect to any Mortgage Loan,
any insurance policy that is required to be maintained from time to time under
this Agreement.

               Required Secondary Carryover Reserve Fund Deposit: With respect
to any Distribution Date, an amount equal to the excess of (i) $10,000 over
(ii) the amount of funds on deposit in the Carryover Reserve Fund.

               Responsible Officer: When used with respect to the Trustee, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.

               Rolling Sixty-Day Delinquency Rate: With respect to any
Distribution Date on or after the Stepdown Date and any Loan Group or Loan
Groups, the average of the Sixty-Day Delinquency Rates for such Loan Group or
Loan Groups and such Distribution Date and the two immediately preceding
Distribution Dates.

               Rule 144A:  Rule 144A under the Securities Act.

               Rule 144A Letter:  As defined in Section 5.02(b).

               S&P: Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and its successors.



                                      54
<PAGE>

               Scheduled Payment: With respect to any Mortgage Loan, the
scheduled monthly payment of principal and/or interest due on any Due Date on
such Mortgage Loan which is payable by the related Mortgagor from time to time
under the related Mortgage Note, determined: (a) after giving effect to (i)
any Deficient Valuation and/or Debt Service Reduction with respect to such
Mortgage Loan and (ii) any reduction in the amount of interest collectible
from the related Mortgagor pursuant to the Relief Act; (b) without giving
effect to any extension granted or agreed to by the Master Servicer pursuant
to Section 3.05(a); and (c) on the assumption that all other amounts, if any,
due under such Mortgage Loan are paid when due.

               Securities Act: The Securities Act of 1933, as amended.

               Sellers: CHL, in its capacity as seller of the CHL Mortgage
Loans to the Depositor, and the Liquidity Trust, in its capacity as seller of
the Liquidity Trust Mortgage Loans to the Depositor.

               Seller Shortfall Interest Requirement: With respect to the
Master Servicer Advance Date in December 2004, is the product of: (1) the
excess of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date, over the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date that have a scheduled payment of interest due in
the related Due Period, and (2) a fraction, the numerator of which is the
weighted average Net Mortgage Rate of the Mortgage Loans (weighted on the
basis of the Stated Principal Balances thereof for such Distribution Date) and
the denominator of which is 12.

               Senior Certificates: The Class AF, Class AV and Class A-R
Certificates.

               Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations hereunder, including, but not limited
to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and
(iv) compliance with the obligations under Section 3.10.

               Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan for the preceding Distribution
Date or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate
on the Stated Principal Balance of such Mortgage Loan for the period covered
by such payment of interest.

               Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per annum.

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

               Sixty-Day Delinquency Rate: With respect to any Distribution
Date on or after the related Stepdown Date and any Loan Group or Loan Groups,
a fraction, expressed as a



                                      55
<PAGE>

percentage, the numerator of which is the aggregate Stated Principal Balance
for such Distribution Date of all Mortgage Loans in such Loan Group or Loan
Groups 60 or more days delinquent as of the close of business on the last day
of the calendar month preceding such Distribution Date (including Mortgage
Loans in foreclosure, bankruptcy and REO Properties) and the denominator of
which is the aggregate Stated Principal Balance for such Distribution Date of
all Mortgage Loans in such Loan Group or Loan Groups.

               Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date, the unpaid principal balance
of the Mortgage Loan as of such date (before any adjustment to the
amortization schedule for any moratorium or similar waiver or grace period),
after giving effect to any partial prepayments or Liquidation Proceeds
received prior to such date and to the payment of principal due on or prior to
such date and irrespective any delinquency in payment by the related
Mortgagor, and (ii) as of any other Distribution Date, the Stated Principal
Balance of the Mortgage Loan as of its Cut-off Date, minus the sum of (a) the
principal portion of the Scheduled Payments (x) due with respect to such
Mortgage Loan during each Due Period ending prior to such Distribution Date
and (y) that were received by the Master Servicer as of the close of business
on the Determination Date related to such Distribution Date or with respect to
which Advances were made as of the Master Servicer Advance Date related to
such Distribution Date, (b) all Principal Prepayments with respect to such
Mortgage Loan received by the Master Servicer during each Prepayment Period
ending prior to such Distribution Date and (c) all Liquidation Proceeds
collected with respect to such Mortgage Loan during each Due Period ending
prior to such Distribution Date, to the extent applied by the Master Servicer
as recoveries of principal in accordance with Section 3.12. The Stated
Principal Balance of any Mortgage Loan that becomes a Liquidated Mortgage Loan
will be zero on each date following the Due Period in which such Mortgage Loan
becomes a Liquidated Mortgage Loan. References herein to the Stated Principal
Balance of the Mortgage Loans at any time shall mean the aggregate Stated
Principal Balance of all Mortgage Loans in the Trust Fund as of such time, and
references herein to the Stated Principal Balance of a Loan Group at any time
shall mean the aggregate Stated Principal Balance of all Mortgage Loans in
such Loan Group at such time.

               Subordinate Certificates: The Fixed Rate Subordinate
Certificates and the Adjustable Rate Subordinate Certificates.

               Subordinate Component Balance: With respect to any Distribution
Date and for each of Loan Group 2 and Loan Group 3, the excess of the
principal balance of such Loan Group as of the first day of the related Due
Period (after giving effect to Principal Prepayments received in the
Prepayment Period ending during such Due Period) over the Certificate
Principal Balance of the Class 1-AV-1 Certificates in the case of Loan Group
2, and the Class 2-AV Certificates in the case of Loan Group 3.

               Subordinate Net Rate Cap: For the Subordinated Certificates and
the Interest Accrual Period related to each Distribution Date, a per annum
rate equal to (1) the sum of the following for each Loan Group: the product of
(x) the Loan Group Net Rate Cap of the Related Loan Group and (y) the
Subordinate Component Balance related to that Loan Group, divided by (2) the
aggregate Certificate Principal Balances of the Subordinated Certificates
immediately prior to that Distribution Date.



                                      56
<PAGE>

               Subsequent Periodic Rate Cap: With respect to each Adjustable
Rate Mortgage Loan, the percentage specified in the related Mortgage Note that
limits permissible increases and decreases in the Mortgage Rate on any
Adjustment Date (other than the initial Adjustment Date).

               Subsequent Recoveries: As to any Distribution Date, with
respect to a Liquidated Mortgage Loan that resulted in a Realized Loss in a
prior calendar month, unexpected amounts received by the Master Servicer (net
of any related expenses permitted to be reimbursed pursuant to Section 3.08
and 3.12) specifically related to such Liquidated Mortgage Loan after the
classification of such Mortgage Loan as a Liquidated Mortgage Loan.

               Subservicer:  As defined in Section 3.02(a).

               Subservicing Agreement:  As defined in Section 3.02(a).

               Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(d).

               Substitution Amount: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(d), the excess of (x) the principal
balance of the Mortgage Loan that is substituted for, over (y) the principal
balance of the related substitute Mortgage Loan, each balance being determined
as of the date of substitution.

               Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d) and
temporary Treasury regulation ss. 301.6231(a)(7)-1T. Initially, this person
shall be the Trustee.

               Tax Matters Person Certificate: With respect to the Master
REMIC, REMIC 1 and REMIC 2, the Class A-R Certificate with a Denomination of
$0.05 and in the form of Exhibit E hereto.

               Terminator:  As defined in Section 9.01.

               Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage Rate that is fixed for 36 months after origination thereof before
such Mortgage Rate becomes subject to adjustment.

               Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.

               Transfer Affidavit:  As defined in Section 5.02(c).

               Transferor Certificate:  As defined in Section 5.02(b).

               Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received
on or with respect thereto on and after the Cut-off Date to the extent not
applied in computing the Cut-off Date Principal Balance thereof, exclusive of
interest not required to be deposited in the Certificate Account pursuant to
Section 3.05(b)(2); (ii) the Certificate Account, the Distribution Account,
the Principal Reserve Fund, the



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<PAGE>

Carryover Reserve Fund, the Credit Comeback Excess Account and all amounts
deposited therein pursuant to the applicable provisions of this Agreement;
(iii) each Corridor Contract, (iv) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed in lieu of foreclosure or otherwise;
(v) the mortgagee's rights under the Insurance Policies with respect to the
Mortgage Loan; (vi) the rights of the Trustee for the benefit of the Class
1-AV-1 Certificateholders under the Class 1-AV-1 Policy; and (vii) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid property.

               Trustee: The Bank of New York, a New York banking corporation,
not in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as
successor trustee hereunder.

               Trustee Advance Notice:  As defined in Section 4.01(d).

               Trustee Advance Rate: With respect to any Advance made by the
Trustee pursuant to Section 4.01(d), a per annum rate of interest determined
as of the date of such Advance equal to the Prime Rate in effect on such date
plus 5.00%.

               Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance.

               Trustee Fee Rate: With respect to each Mortgage Loan, the per
annum rate agreed upon in writing on or prior to the Closing Date by the
Trustee and the Depositor, which is 0.009% per annum.

               Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage Rate that is fixed for 24 months after origination thereof before
such Mortgage Rate becomes subject to adjustment.

               Underwriter's Exemption: Prohibited Transaction Exemption
2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or
any substantially similar administrative exemption granted by the U.S.
Department of Labor.

               Underwriters: Countrywide Securities Corporation, Banc of
America Securities LLC and J.P. Morgan Securities Inc.

               Unpaid Realized Loss Amount: For any Class of Subordinate
Certificates and any Distribution Date, (x) the portion of the aggregate
Applied Realized Loss Amount previously allocated to that Class remaining
unpaid from prior Distribution Dates minus (y) any increase in the Certificate
Principal Balance of that Class due to the allocation of Subsequent Recoveries
to the Certificate Principal Balance of that Class pursuant to Section 4.04(l)
or 4.04(m).

               Voting Rights: The voting rights of all the Certificates that
are allocated to any Certificates for purposes of the voting provisions
hereunder. Voting Rights allocated to each Class of Certificates shall be
allocated 95% to the Certificates other than the Class A-R,



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Class CF, Class CV, Class PF and Class PV Certificates (with the allocation
among the Certificates to be in proportion to the Certificate Principal
Balance of each Class relative to the Certificate Principal Balance of all
other such Classes), and 1% to each of the Class A-R, Class CF, Class CV,
Class PF and Class PV Certificates. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests. Notwithstanding any of the foregoing, on any date on which any
Class 1-AV-1 Certificates are outstanding or any amounts are owed the Class
1-AV-1 Insurer under this Agreement, unless a Class 1-AV-1 Insurer Default
shall have occurred and be continuing, the Class 1-AV-1 Insurer will be
entitled to exercise the Voting Rights of the Class 1-AV-1 Certificateholders,
without the consent of the Class 1-AV-1 Certificateholders, and the Class
1-AV-1 Certificateholders may exercise such rights only with the prior written
consent of the Class 1-AV-1 Insurer.

               Section 1.01 Certain Interpretive Provisions.

               All terms defined in this Agreement shall have the defined
meanings when used in any certificate, agreement or other document delivered
pursuant hereto unless otherwise defined therein. For purposes of this
Agreement and all such certificates and other documents, unless the context
otherwise requires: (a) accounting terms not otherwise defined in this
Agreement, and accounting terms partly defined in this Agreement to the extent
not defined, shall have the respective meanings given to them under generally
accepted accounting principles; (b) the words "hereof," "herein" and
"hereunder" and words of similar import refer to this Agreement (or the
certificate, agreement or other document in which they are used) as a whole
and not to any particular provision of this Agreement (or such certificate,
agreement or document); (c) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to this Agreement, and
references to any paragraph, subsection, clause or other subdivision within
any Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (d) the term "including" means
"including without limitation"; (e) references to any law or regulation refer
to that law or regulation as amended from time to time and include any
successor law or regulation; (f) references to any agreement refer to that
agreement as amended from time to time; and (g) references to any Person
include that Person's permitted successors and assigns.

                                 ARTICLE II.
                         CONVEYANCE OF MORTGAGE LOANS;
                        REPRESENTATIONS AND WARRANTIES

               Section 2.01 Conveyance of Mortgage Loans.

               (a) Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of such Seller in and to the applicable Mortgage Loans, including all
interest and principal received and receivable by such Seller on or with
respect to applicable Mortgage Loans after the Cut-off Date (to the extent not
applied in computing the Cut-off Date Principal Balance thereof) or deposited
into the Certificate Account by the Master Servicer on behalf of such Seller
as part of the Initial Certificate Account Deposit as provided in this
Agreement, other than principal due on the applicable Mortgage Loans on or
prior to the Cut-off Date and interest accruing prior to the Cut-off Date. The
Master Servicer confirms that, on behalf of the Sellers, concurrently with the



                                      59
<PAGE>

transfer and assignment, it has deposited into the Certificate Account the
Initial Certificate Account Deposit.

               Immediately upon the conveyance of the Mortgage Loans referred
to in the preceding paragraph, the Depositor (i) sells, transfers, assigns,
sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders and the Class 1-AV-1 Insurer, without recourse, all right
title and interest in the Mortgage Loans and (ii) causes the Class 1-AV-1
Insurer to deliver the Class 1-AV-1 Policy to the Trustee.

               CHL further agrees to assign all of its right, title and
interest in and to the interest rate corridor transaction evidenced by each
Confirmation, and to cause all of its obligations in respect of such
transaction to be assumed by, the Trustee on behalf of the Trust Fund, on the
terms and conditions set forth in the Corridor Contract Assignment Agreement.

               (b) [Reserved].

               (c) Each Seller has entered into this Agreement in
consideration for the purchase of the Mortgage Loans by the Depositor and has
agreed to take the actions specified herein. The Depositor, concurrently with
the execution and delivery of this Agreement, hereby sells, transfers, assigns
and otherwise conveys to the Trustee for the use and benefit of the
Certificateholders, without recourse, all right title and interest in the
portion of the Trust Fund not otherwise conveyed to the Trustee pursuant to
Section 2.01(a).

               (d) [Reserved].

               (e) [Reserved].

               (f) [Reserved].

               (g) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered to, and deposited with, the
Co-Trustee (or, in the case of the Delay Delivery Mortgage Loans, will deliver
to, and deposit with, the Co-Trustee within the time periods specified in the
definition of Delay Delivery Mortgage Loans) (except as provided in clause
(vi) below) for the benefit of the Certificateholders, the following documents
or instruments with respect to each such Mortgage Loan so assigned (with
respect to each Mortgage Loan, clause (i) through (vi) below, together, the
"Mortgage File" for each such Mortgage Loan):

                        (i) the original Mortgage Note, endorsed by the
                applicable Seller or the originator of such Mortgage Loan,
                without recourse, in the following form: "Pay to the order of
                ________________ without recourse", with all intervening
                endorsements that show a complete chain of endorsement from
                the originator to the applicable Seller, or, if the original
                Mortgage Note has been lost or destroyed and not replaced, an
                original lost note affidavit from the applicable Seller,
                stating that the original Mortgage Note was lost or destroyed,
                together with a copy of the related Mortgage Note;

                        (ii) in the case of each Mortgage Loan that is not a
                MERS Mortgage Loan, the original recorded Mortgage, and in the
                case of each MERS Mortgage



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<PAGE>

                Loan, the original Mortgage, noting the presence of the MIN of
                the Mortgage Loan and language indicating that the Mortgage
                Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with
                evidence of recording indicated thereon, or a copy of the
                Mortgage certified by the public recording office in which
                such Mortgage has been recorded;

                        (iii) in the case of each Mortgage Loan that is not a
                MERS Mortgage Loan, a duly executed assignment of the Mortgage
                to "Asset-Backed Certificates, Series 2004-12, CWABS, Inc., by
                The Bank of New York, a New York banking corporation, as
                trustee under the Pooling and Servicing Agreement dated as of
                November 1, 2004, without recourse" (each such assignment,
                when duly and validly completed, to be in recordable form and
                sufficient to effect the assignment of and transfer to the
                assignee thereof, under the Mortgage to which such assignment
                relates);

                        (iv) the original recorded assignment or assignments
                of the Mortgage together with all interim recorded assignments
                of such Mortgage (noting the presence of a MIN in the case of
                each MERS Mortgage Loan);

                        (v) the original or copies of each assumption,
                modification, written assurance or substitution agreement, if
                any; and

                        (vi) the original or duplicate original lender's title
                policy or a printout of the electronic equivalent and all
                riders thereto or, in the event such original title policy has
                not been received from the insurer, such original or duplicate
                original lender's title policy and all riders thereto shall be
                delivered within one year of the Closing Date.

               In addition, in connection with the assignment of any MERS
Mortgage Loan, each Seller agrees that it will cause, at such Seller's own
expense, the MERS(R) System to indicate (and provide evidence to the Trustee
that it has done so) that such Mortgage Loans have been assigned by such
Seller to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer
files (a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY
THE FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Sellers further agree that they will not, and will not
permit the Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to any Mortgage
Loan during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.

               In the event that in connection with any Mortgage Loan that is
not a MERS Mortgage Loan a Seller cannot deliver the original recorded
Mortgage or all interim recorded assignments of the Mortgage satisfying the
requirements of clause (ii), (iii) or (iv) concurrently with the execution and
delivery hereof, such Seller shall deliver or cause to be delivered to the




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<PAGE>

Co-Trustee a true copy of such Mortgage and of each such undelivered interim
assignment of the Mortgage each certified by such Seller, the applicable title
company, escrow agent or attorney, or the originator of such Mortgage, as the
case may be, to be a true and complete copy of the original Mortgage or
assignment of Mortgage submitted for recording. For any such Mortgage Loan
that is not a MERS Mortgage Loan each Seller shall promptly deliver or cause
to be delivered to the Co-Trustee such original Mortgage and such assignment
or assignments with evidence of recording indicated thereon upon receipt
thereof from the public recording official, or a copy thereof, certified, if
appropriate, by the relevant recording office, but in no event shall any such
delivery be made later than 270 days following the Closing Date; provided that
in the event that by such date such Seller is unable to deliver or cause to be
delivered each such Mortgage and each interim assignment by reason of the fact
that any such documents have not been returned by the appropriate recording
office, or, in the case of each interim assignment, because the related
Mortgage has not been returned by the appropriate recording office, such
Seller shall deliver or cause to be delivered such documents to the Co-Trustee
as promptly as possible upon receipt thereof. If the public recording office
in which a Mortgage or interim assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office, shall satisfy a Seller's
obligations in Section 2.01. If any document submitted for recording pursuant
to this Agreement is (x) lost prior to recording or rejected by the applicable
recording office, the applicable Seller shall immediately prepare or cause to
be prepared a substitute and submit it for recording, and shall deliver copies
and originals thereof in accordance with the foregoing or (y) lost after
recording, the applicable Seller shall deliver to the Co-Trustee a copy of
such document certified by the applicable public recording office to be a true
and complete copy of the original recorded document. Each Seller shall
promptly forward or cause to be forwarded to the Co-Trustee (x) from time to
time additional original documents evidencing an assumption or modification of
a Mortgage Loan and (y) any other documents required to be delivered by the
Depositor or the Master Servicer to the Co-Trustee within the time periods
specified in this Section 2.01.

               With respect to each Mortgage Loan other than a MERS Mortgage
Loan as to which the related Mortgaged Property and Mortgage File are located
in (a) the State of California or (b) any other jurisdiction under the laws of
which the recordation of the assignment specified in clause (iii) above is not
necessary to protect the Trustee's and the Certificateholders' interest in the
related Mortgage Loan, as evidenced by an Opinion of Counsel delivered by CHL
to the Trustee and a copy to the Rating Agencies, in lieu of recording the
assignment specified in clause (iii) above, the applicable Seller may deliver
an unrecorded assignment in blank, in form otherwise suitable for recording to
the Co-Trustee; provided that if the related Mortgage has not been returned
from the applicable public recording office, such assignment, or any copy
thereof, of the Mortgage may exclude the information to be provided by the
recording office. As to any Mortgage Loan other than a MERS Mortgage Loan, the
procedures of the preceding sentence shall be applicable only so long as the
related Mortgage File is maintained in the possession of the Co-Trustee in the
State or jurisdiction described in such sentence. In the event that with
respect to Mortgage Loans other than MERS Mortgage Loans (i) either Seller,
the Depositor, the Master Servicer or the NIM Insurer gives written notice to
the Trustee that recording is required to protect the right, title and
interest of the Trustee on behalf of the Certificateholders in and to any
Mortgage Loan, (ii) a court recharacterizes any sale of the Mortgage Loans as
a financing, or (iii) as a result of any change in or amendment to the laws of
the State or jurisdiction described



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<PAGE>

in the first sentence of this paragraph or any applicable political
subdivision thereof, or any change in official position regarding application
or interpretation of such laws, including a holding by a court of competent
jurisdiction, such recording is so required, the Co-Trustee shall complete the
assignment in the manner specified in clause (iii) of the second paragraph of
this Section 2.01(g) and CHL shall submit or cause to be submitted for
recording as specified above or, should CHL fail to perform such obligations,
the Trustee shall cause the Master Servicer, at the Master Servicer's expense,
to cause each such previously unrecorded assignment to be submitted for
recording as specified above. In the event a Mortgage File is released to the
Master Servicer as a result of the Master Servicer's having completed a
Request for Document Release, the Trustee shall complete the assignment of the
related Mortgage in the manner specified in clause (iii) of the second
paragraph of this Section 2.01(g).

               So long as the Co-Trustee or its agent maintains an office in
the State of California, the Co-Trustee or its agent shall maintain possession
of and not remove or attempt to remove from the State of California any of the
Mortgage Files as to which the related Mortgaged Property is located in such
State. In the event that a Seller fails to record an assignment of a Mortgage
Loan as herein provided within 90 days of notice of an event set forth in
clause (i), (ii) or (iii) of the above paragraph, the Master Servicer shall
prepare and, if required hereunder, file such assignments for recordation in
the appropriate real property or other records office. Each Seller hereby
appoints the Master Servicer (and any successor servicer hereunder) as its
attorney-in-fact with full power and authority acting in its stead for the
purpose of such preparation, execution and filing.

               In the case of Mortgage Loans that become the subject of a
Principal Prepayment between the Closing Date and the Cut-off Date, CHL shall
deposit or cause to be deposited in the Certificate Account the amount
required to be deposited therein with respect to such payment pursuant to
Section 3.05 hereof.

               Notwithstanding anything to the contrary in this Agreement,
within thirty days after the Closing Date, CHL (on behalf of each Seller)
shall either (i) deliver to the Co-Trustee the Mortgage File as required
pursuant to this Section 2.01 for each Delay Delivery Mortgage Loan or (ii)
(A) repurchase the Delay Delivery Mortgage Loan or (B) substitute the Delay
Delivery Mortgage Loan for a Replacement Mortgage Loan, which repurchase or
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03, provided that if CHL fails to deliver a Mortgage
File for any Delay Delivery Mortgage Loan within the period provided in the
prior sentence, the cure period provided for in Section 2.02 or in Section
2.03 shall not apply to the initial delivery of the Mortgage File for such
Delay Delivery Mortgage Loan, but rather CHL shall have five (5) Business Days
to cure such failure to deliver. CHL shall promptly provide each Rating Agency
with written notice of any cure, repurchase or substitution made pursuant to
the proviso of the preceding sentence. On or before the thirtieth (30th) day
(or if such thirtieth day is not a Business Day, the succeeding Business Day)
after the Closing Date the Trustee shall, in accordance with the provisions of
Section 2.02, send a Delay Delivery Certification substantially in the form
annexed hereto as Exhibit G-3 (with any applicable exceptions noted thereon)
for all Delay Delivery Mortgage Loans delivered within thirty (30) days after
such date. The Trustee will promptly send a copy of such Delay Delivery
Certification to each Rating Agency.



                                      63
<PAGE>

               The Trust Fund will not acquire or hold any Mortgage Loan that
would violate the representations made by CHL in Section 2.03(b)(70), (72),
(77)(vii) or (77)(viii).

               Section 2.02 Acceptance by Trustee of the Mortgage Loans.

               (a) The Co-Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial Certification
in the form annexed hereto as Exhibit G-1 and in the list of exceptions
attached thereto, of the documents referred to in clauses (i) and (iii) of
Section 2.01(g) above with respect to the Mortgage Loans and all other assets
included in the Trust Fund and declares that it holds and will hold such
documents and the other documents delivered to it constituting the Mortgage
Files, and that it holds or will hold such other assets included in the Trust
Fund, in trust for the exclusive use and benefit of all present and future
Certificateholders.

               The Trustee agrees to execute and deliver on the Closing Date
to the Depositor, the Master Servicer and CHL (on behalf of each Seller) an
Certification substantially in the form annexed hereto as Exhibit G-1 to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), the
documents described in Section 2.01(g)(i) and, in the case of each Mortgage
Loan that is not a MERS Mortgage Loan, the documents described in Section
2.01(g)(iii) with respect to such Mortgage Loans as are in the Co-Trustee's
possession and based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and relate to
such Mortgage Loan. The Trustee agrees to execute and deliver within 30 days
after the Closing Date to the Depositor, the Master Servicer and CHL (on
behalf of each Seller) an Interim Certification substantially in the form
annexed hereto as Exhibit G-2 to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in such certification as not
covered by such certification) all documents required to be delivered to the
Co-Trustee pursuant to the Agreement with respect to such Mortgage Loans are
in its possession (except those documents described in Section 2.01(g)(vi))
and based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and relate to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v),
(vi), (viii), (ix) and (xvii) of the definition of the "Mortgage Loan
Schedule" accurately reflects information set forth in the Mortgage File. On
or before the thirtieth (30th) day after the Closing Date (or if such
thirtieth day is not a Business Day, the succeeding Business Day), the Trustee
shall deliver to the Depositor, the Master Servicer and CHL (on behalf of each
Seller) a Delay Delivery Certification with respect to the Mortgage Loans
substantially in the form annexed hereto as Exhibit G-3, with any applicable
exceptions noted thereon. The Co-Trustee or the Trustee, as applicable, shall
be under no duty or obligation to inspect, review or examine such documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.

               Not later than 180 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer and CHL (on behalf of each
Seller), the Class 1-AV-1 Insurer and to any Certificateholder that so
requests, a Final Certification with respect to the Mortgage Loans




                                      64
<PAGE>

substantially in the form annexed hereto as Exhibit H, with any applicable
exceptions noted thereon.

               In connection with the Trustee's completion and delivery of
such Final Certification, the Co-Trustee, at the Trustee's direction, shall
review each Mortgage File with respect to the Mortgage Loans to determine that
such Mortgage File contains the following documents:

                        (i) the original Mortgage Note, endorsed by the
                applicable Seller or the originator of such Mortgage Loan,
                without recourse, in the following form: "Pay to the order of
                ________________ without recourse", with all intervening
                endorsements that show a complete chain of endorsement from
                the originator to such Seller, or, if the original Mortgage
                Note has been lost or destroyed and not replaced, an original
                lost note affidavit from such Seller, stating that the
                original Mortgage Note was lost or destroyed, together with a
                copy of the related Mortgage Note;

                        (ii) in the case of each Mortgage Loan that is not a
                MERS Mortgage Loan, the original recorded Mortgage, and in the
                case of each Mortgage Loan that is a MERS Mortgage Loan, the
                original Mortgage, noting the presence of the MIN of the
                Mortgage Loan and language indicating that the Mortgage Loan
                is a MOM Loan if the Mortgage Loan is a MOM Loan, with
                evidence of recording indicated thereon, or a copy of the
                Mortgage certified by the public recording office in which
                Mortgage has been recorded;

                        (iii) in the case of each Mortgage Loan that is not a
                MERS Mortgage Loan, a duly executed assignment of the Mortgage
                in the form permitted by Section 2.01;

                        (iv) the original recorded assignment or assignments
                of the Mortgage together with all interim recorded assignments
                of such Mortgage (noting the presence of a MIN in the case of
                each MERS Mortgage Loan);

                        (v) the original or copies of each assumption,
                modification, written assurance or substitution agreement, if
                any; and

                        (vi) the original or duplicate original lender's title
                policy or a printout of the electronic equivalent and all
                riders thereto.

               If, in the course of such review, the Co-Trustee finds any
document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the Trustee shall
include such exceptions in such Final Certification (and the Trustee shall
state in such Final Certification whether any Mortgage File does not then
include the original or duplicate original lender's title policy or a printout
of the electronic equivalent and all riders thereto). If the public recording
office in which a Mortgage or assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv)



                                      65
<PAGE>

above, as applicable. CHL shall promptly correct or cure such defect referred
to above within 90 days from the date it was so notified of such defect and,
if CHL does not correct or cure such defect within such period, CHL shall
either (A) if the time to cure such defect expires prior to the end of the
second anniversary of the Closing Date, substitute for the related Mortgage
Loan a Replacement Mortgage Loan, which substitution shall be accomplished in
the manner and subject to the conditions set forth in Section 2.03, or (B)
purchase such Mortgage Loan from the Trust Fund within 90 days from the date
CHL was notified of such defect in writing at the Purchase Price of such
Mortgage Loan; provided that any such substitution pursuant to (A) above or
repurchase pursuant to (B) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05 hereof and
any substitution pursuant to (A) above shall not be effected prior to the
additional delivery to the Co-Trustee of a Request for File Release. No
substitution will be made in any calendar month after the Determination Date
for such month. The Purchase Price for any such Mortgage Loan shall be
deposited by CHL in the Certificate Account and, upon receipt of such deposit
and Request for File Release with respect thereto, the Co-Trustee shall
release the related Mortgage File to CHL and shall execute and deliver at
CHL's request such instruments of transfer or assignment as CHL has prepared,
in each case without recourse, as shall be necessary to vest in CHL, or a
designee, the Trustee's interest in any Mortgage Loan released pursuant
hereto. If pursuant to the foregoing provisions CHL repurchases a Mortgage
Loan that is a MERS Mortgage Loan, the Master Servicer shall cause MERS to
execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to CHL and shall cause such Mortgage to be
removed from registration on the MERS(R) System in accordance with MERS' rules
and regulations.

               The Co-Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. Each Seller shall promptly deliver to the Co-Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of
such Seller from time to time.

               It is understood and agreed that the obligation of the Sellers
to substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.02(a) above shall constitute the sole remedy
respecting such defect available to the Trustee, the Co-Trustee, the Depositor
and any Certificateholder against the Sellers.

               It is understood and agreed that the obligation of a Seller to
substitute for or to purchase, pursuant to Section 2.02(a), any Mortgage Loan
whose Mortgage File contains any document or documents that does not meet the
requirements of clauses (i)-(iv) and (vi) above and which defect is not
corrected or cured by such Seller within 90 days from the date it was notified
of such defect, shall constitute the sole remedy respecting such defect
available to the Trustee, the Co-Trustee, the Depositor and any
Certificateholder against the Sellers.



                                      66
<PAGE>

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

               (a) The Master Servicer hereby represents and warrants to the
Depositor and the Trustee as follows, as of the date hereof with respect to
the Mortgage Loans:

                       (1) The Master Servicer is duly organized as a Texas
        limited partnership and is validly existing and in good standing under
        the laws of the State of Texas and is duly authorized and qualified to
        transact any and all business contemplated by this Agreement to be
        conducted by the Master Servicer in any state in which a Mortgaged
        Property is located or is otherwise not required under applicable law
        to effect such qualification and, in any event, is in compliance with
        the doing business laws of any such state, to the extent necessary to
        ensure its ability to enforce each Mortgage Loan, to service the
        Mortgage Loans in accordance with the terms of this Agreement and to
        perform any of its other obligations under this Agreement in
        accordance with the terms hereof.

                       (2) The Master Servicer has the full partnership power
        and authority to sell and service each Mortgage Loan, and to execute,
        deliver and perform, and to enter into and consummate the transactions
        contemplated by this Agreement and has duly authorized by all
        necessary partnership action on the part of the Master Servicer the
        execution, delivery and performance of this Agreement; and this
        Agreement, assuming the due authorization, execution and delivery
        hereof by the other parties hereto, constitutes a legal, valid and
        binding obligation of the Master Servicer, enforceable against the
        Master Servicer in accordance with its terms, except that (a) the
        enforceability hereof may be limited by bankruptcy, insolvency,
        moratorium, receivership and other similar laws relating to creditors'
        rights generally and (b) the remedy of specific performance and
        injunctive and other forms of equitable relief may be subject to
        equitable defenses and to the discretion of the court before which any
        proceeding therefor may be brought.

                       (3) The execution and delivery of this Agreement by the
        Master Servicer, the servicing of the Mortgage Loans by the Master
        Servicer under this Agreement, the consummation of any other of the
        transactions contemplated by this Agreement, and the fulfillment of or
        compliance with the terms hereof are in the ordinary course of
        business of the Master Servicer and will not (A) result in a material
        breach of any term or provision of the certificate of limited
        partnership, partnership agreement or other organizational document of
        the Master Servicer or (B) materially conflict with, result in a
        material breach, violation or acceleration of, or result in a material
        default under, the terms of any other material agreement or instrument
        to which the Master Servicer is a party or by which it may be bound,
        or (C) constitute a material violation of any statute, order or
        regulation applicable to the Master Servicer of any court, regulatory
        body, administrative agency or governmental body



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<PAGE>

        having jurisdiction over the Master Servicer; and the Master Servicer
        is not in breach or violation of any material indenture or other
        material agreement or instrument, or in violation of any statute,
        order or regulation of any court, regulatory body, administrative
        agency or governmental body having jurisdiction over it which breach
        or violation may materially impair the Master Servicer's ability to
        perform or meet any of its obligations under this Agreement.

                       (4) The Master Servicer is an approved servicer of
        conventional mortgage loans for Fannie Mae and Freddie Mac and is a
        mortgagee approved by the Secretary of Housing and Urban Development
        pursuant to sections 203 and 211 of the National Housing Act.

                       (5) No litigation is pending or, to the best of the
        Master Servicer's knowledge, threatened, against the Master Servicer
        that would materially and adversely affect the execution, delivery or
        enforceability of this Agreement or the ability of the Master Servicer
        to service the Mortgage Loans or to perform any of its other
        obligations under this Agreement in accordance with the terms hereof.

                       (6) No consent, approval, authorization or order of any
        court or governmental agency or body is required for the execution,
        delivery and performance by the Master Servicer of, or compliance by
        the Master Servicer with, this Agreement or the consummation of the
        transactions contemplated hereby, or if any such consent, approval,
        authorization or order is required, the Master Servicer has obtained
        the same.

                       (7) The Master Servicer is a member of MERS in good
        standing, and will comply in all material respects with the rules and
        procedures of MERS in connection with the servicing of the Mortgage
        Loans for as long as such Mortgage Loans are registered with MERS.

               (b) CHL hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Cut-off Date (unless otherwise indicated or the
context otherwise requires, percentages with respect to the Mortgage Loans in
the Trust Fund or in a Loan Group or Loan Groups are measured by the Cut-off
Date Principal Balance of the Mortgage Loans in the Trust Fund or of the
Mortgage Loans in the related Loan Group or Loan Groups, as applicable):

                       (1) CHL is duly organized as a New York corporation and
        is validly existing and in good standing under the laws of the State
        of New York and is duly authorized and qualified to transact any and
        all business contemplated by this Agreement to be conducted by CHL in
        any state in which a Mortgaged Property is located or is otherwise not
        required under applicable law to effect such qualification and, in any
        event, is in compliance with the doing business laws of any such
        state, to the extent necessary to ensure its ability to enforce each
        Mortgage Loan, to sell the CHL Mortgage Loans in accordance with the
        terms of this Agreement and to perform any of its other obligations
        under this Agreement in accordance with the terms hereof and thereof.

                       (2) CHL has the full corporate power and authority to
        sell each CHL Mortgage Loan, and to execute, deliver and perform, and
        to enter into and consummate the transactions contemplated by this
        Agreement and has duly authorized by all necessary corporate action on
        the part of CHL the execution, delivery and performance of this
        Agreement; and this Agreement, assuming the due authorization,
        execution and delivery hereof by the other parties hereto, constitutes
        a legal, valid and binding obligation of



                                      68
<PAGE>

        CHL, enforceable against CHL in accordance with its terms, except that
        (a) the enforceability hereof may be limited by bankruptcy,
        insolvency, moratorium, receivership and other similar laws relating
        to creditors' rights generally and (b) the remedy of specific
        performance and injunctive and other forms of equitable relief may be
        subject to equitable defenses and to the discretion of the court
        before which any proceeding therefor may be brought.

                       (3) The execution and delivery of this Agreement by
        CHL, the sale of the CHL Mortgage Loans by CHL under this Agreement,
        the consummation of any other of the transactions contemplated by this
        Agreement, and the fulfillment of or compliance with the terms hereof
        are in the ordinary course of business of CHL and will not (A) result
        in a material breach of any term or provision of the charter or
        by-laws of CHL or (B) materially conflict with, result in a material
        breach, violation or acceleration of, or result in a material default
        under, the terms of any other material agreement or instrument to
        which CHL is a party or by which it may be bound, or (C) constitute a
        material violation of any statute, order or regulation applicable to
        CHL of any court, regulatory body, administrative agency or
        governmental body having jurisdiction over CHL; and CHL is not in
        breach or violation of any material indenture or other material
        agreement or instrument, or in violation of any statute, order or
        regulation of any court, regulatory body, administrative agency or
        governmental body having jurisdiction over it which breach or
        violation may materially impair CHL's ability to perform or meet any
        of its obligations under this Agreement.

                       (4) CHL is an approved seller of conventional mortgage
        loans for Fannie Mae and Freddie Mac and is a mortgagee approved by
        the Secretary of Housing and Urban Development pursuant to sections
        203 and 211 of the National Housing Act.

                       (5) No litigation is pending or, to the best of CHL's
        knowledge, threatened, against CHL that would materially and adversely
        affect the execution, delivery or enforceability of this Agreement or
        the ability of CHL to sell the CHL Mortgage Loans or to perform any of
        its other obligations under this Agreement in accordance with the
        terms hereof.

                       (6) No consent, approval, authorization or order of any
        court or governmental agency or body is required for the execution,
        delivery and performance by CHL of, or compliance by CHL with, this
        Agreement or the consummation of the transactions contemplated hereby,
        or if any such consent, approval, authorization or order is required,
        CHL has obtained the same.

                       (7) The information set forth on Exhibit F-1 hereto
        with respect to each Mortgage Loan is true and correct in all material
        respects as of the Closing Date.

                       (8) CHL will treat the transfer of the CHL Mortgage
        Loans to the Depositor as a sale of the CHL Mortgage Loans for all
        tax, accounting and regulatory purposes.



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<PAGE>

                       (9) None of the Mortgage Loans is delinquent in payment
        of principal and interest.

                       (10) No Mortgage Loan had a Loan-to-Value Ratio at
        origination in excess of 100.00%.

                       (11) Each Mortgage Loan is secured by a valid and
        enforceable first lien on the related Mortgaged Property subject only
        to (1) the lien of non-delinquent current real property taxes and
        assessments, (2) covenants, conditions and restrictions, rights of
        way, easements and other matters of public record as of the date of
        recording of such Mortgage, such exceptions appearing of record being
        acceptable to mortgage lending institutions generally or specifically
        reflected in the appraisal made in connection with the origination of
        the related Mortgage Loan and (3) other matters to which like
        properties are commonly subject that do not materially interfere with
        the benefits of the security intended to be provided by such Mortgage.

                       (12) Immediately prior to the assignment of each CHL
        Mortgage Loan to the Depositor, CHL had good title to, and was the
        sole owner of, such CHL Mortgage Loan free and clear of any pledge,
        lien, encumbrance or security interest and had full right and
        authority, subject to no interest or participation of, or agreement
        with, any other party, to sell and assign the same pursuant to this
        Agreement.

                       (13) There is no delinquent tax or assessment lien
        against any Mortgaged Property.

                       (14) There is no valid offset, claim, defense or
        counterclaim to any Mortgage Note or Mortgage, including the
        obligation of the Mortgagor to pay the unpaid principal of or interest
        on such Mortgage Note.

                       (15) There are no mechanics' liens or claims for work,
        labor or material affecting any Mortgaged Property that are or may be
        a lien prior to, or equal with, the lien of such Mortgage, except
        those that are insured against by the title insurance policy referred
        to in item (18) below.

                       (16) As of the Closing Date, to the best of CHL's
        knowledge, each Mortgaged Property is free of material damage and is
        in good repair.

                       (17) As of the Closing Date, neither CHL nor any prior
        Holder of any Mortgage has modified the Mortgage in any material
        respect (except that a Mortgage Loan may have been modified by a
        written instrument that has been recorded or submitted for
        recordation, if necessary, to protect the interests of the
        Certificateholders and the original or a copy of which has been
        delivered to the Trustee); satisfied, cancelled or subordinated such
        Mortgage in whole or in part; released the related Mortgaged Property
        in whole or in part from the lien of such Mortgage; or executed any
        instrument of release, cancellation, modification (except as expressly
        permitted above) or satisfaction with respect thereto.



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<PAGE>

                       (18) A lender's policy of title insurance together with
        a condominium endorsement and extended coverage endorsement, if
        applicable, in an amount at least equal to the Cut-off Date Principal
        Balance of each such Mortgage Loan or a commitment (binder) to issue
        the same was effective on the date of the origination of each Mortgage
        Loan, each such policy is valid and remains in full force and effect,
        and each such policy was issued by a title insurer qualified to do
        business in the jurisdiction where the Mortgaged Property is located
        and acceptable to Fannie Mae and Freddie Mac and is in a form
        acceptable to Fannie Mae and Freddie Mac, which policy insures the
        Sellers and successor owners of indebtedness secured by the insured
        Mortgage, as to the first priority lien, of the Mortgage subject to
        the exceptions set forth in paragraph (11) above; to the best of CHL's
        knowledge, no claims have been made under such mortgage title
        insurance policy and no prior Holder of the related Mortgage,
        including either Seller, has done, by act or omission, anything that
        would impair the coverage of such mortgage title insurance policy.

                       (19) No Mortgage Loan was the subject of a Principal
        Prepayment in full between the Closing Date and the Cut-off Date.

                       (20) To the best of CHL's knowledge, all of the
        improvements that were included for the purpose of determining the
        Appraised Value of the Mortgaged Property lie wholly within the
        boundaries and building restriction lines of such property, and no
        improvements on adjoining properties encroach upon the Mortgaged
        Property.

                       (21) To the best of CHL's knowledge, no improvement
        located on or being part of the Mortgaged Property is in violation of
        any applicable zoning law or regulation. To the best of CHL's
        knowledge, all inspections, licenses and certificates required to be
        made or issued with respect to all occupied portions of the Mortgaged
        Property and, with respect to the use and occupancy of the same,
        including but not limited to certificates of occupancy and fire
        underwriting certificates, have been made or obtained from the
        appropriate authorities, unless the lack thereof would not have a
        material adverse effect on the value of such Mortgaged Property, and
        the Mortgaged Property is lawfully occupied under applicable law.

                       (22) The Mortgage Note and the related Mortgage are
        genuine, and each is the legal, valid and binding obligation of the
        maker thereof, enforceable in accordance with its terms and under
        applicable law, except that (a) the enforceability thereof may be
        limited by bankruptcy, insolvency, moratorium, receivership and other
        similar laws relating to creditors' rights generally and (b) the
        remedy of specific performance and injunctive and other forms of
        equitable relief may be subject to equitable defenses and to the
        discretion of the court before which any proceeding therefor may be
        brought. To the best of CHL's knowledge, all parties to the Mortgage
        Note and the Mortgage had legal capacity to execute the Mortgage Note
        and the Mortgage and each Mortgage Note and Mortgage have been duly
        and properly executed by such parties.

                       (23) The proceeds of the Mortgage Loan have been fully
        disbursed, there is no requirement for future advances thereunder, and
        any and all requirements as to completion of any on-site or off-site
        improvements and as to disbursements of any



                                      71
<PAGE>

        escrow funds therefor have been complied with. All costs, fees and
        expenses incurred in making, or closing or recording the Mortgage Loan
        were paid.

                       (24) The related Mortgage contains customary and
        enforceable provisions that render the rights and remedies of the
        Holder thereof adequate for the realization against the Mortgaged
        Property of the benefits of the security, including, (i) in the case
        of a Mortgage designated as a deed of trust, by trustee's sale, and
        (ii) otherwise by judicial foreclosure.

                       (25) With respect to each Mortgage constituting a deed
        of trust, a trustee, duly qualified under applicable law to serve as
        such, has been properly designated and currently so serves and is
        named in such Mortgage, and no fees or expenses are or will become
        payable by the Certificateholders to the trustee under the deed of
        trust, except in connection with a trustee's sale after default by the
        Mortgagor.

                       (26) Each Mortgage Note and each Mortgage is acceptable
        in form to Fannie Mae and Freddie Mac.

                       (27) There exist no deficiencies with respect to escrow
        deposits and payments, if such are required, for which customary
        arrangements for repayment thereof have not been made, and no escrow
        deposits or payments of other charges or payments due the Sellers have
        been capitalized under the Mortgage or the related Mortgage Note.

                       (28) The origination, underwriting, servicing and
        collection practices with respect to each Mortgage Loan have been in
        all respects legal, proper, prudent and customary in the mortgage
        lending and servicing business, as conducted by prudent lending
        institutions which service mortgage loans of the same type in the
        jurisdiction in which the Mortgaged Property is located.

                       (29) There is no pledged account or other security
        other than real estate securing the Mortgagor's obligations.

                       (30) No Mortgage Loan has a shared appreciation
        feature, or other contingent interest feature.

                       (31) Each Mortgage Loan contains a customary "due on
        sale" clause.

                       (32) No less than approximately 81.50% of the Mortgage
        Loans in Loan Group 1 are secured by single family detached dwellings.
        No more than approximately 4.00% of the Mortgage Loans in Loan Group 1
        are secured by two- to four-family dwellings. No more than
        approximately 4.06% of the Mortgage Loans in Loan Group 1 are secured
        by low-rise condominium units. No more than approximately 0.11% of the
        Mortgage Loans in Loan Group 1 are secured by high-rise condominium
        units. No more than approximately 0.08% of the Mortgage Loans in Loan
        Group 1 are secured by manufactured housing. No more than
        approximately 10.25% of the Mortgage Loans in Loan Group 1 are secured
        by PUDs. No less than approximately 74.35% of the Mortgage Loans in
        Loan Group 2 are secured by single family detached dwellings. No more
        than approximately 3.95% of the Mortgage Loans in Loan Group 2 are
        secured by



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<PAGE>

        two- to four-family dwellings. No more than approximately 6.37% of the
        Mortgage Loans in Loan Group 2 are secured by low-rise condominium
        units. No more than approximately 0.21% of the Mortgage Loans in Loan
        Group 2 are secured by high-rise condominium units. None of the
        Mortgage Loans in Loan Group 2 are secured by manufactured housing. No
        more than approximately 15.13% of the Mortgage Loans in Loan Group 2
        are secured by PUDs. No less than approximately 75.60% of the Mortgage
        Loans in Loan Group 3 are secured by single family detached dwellings.
        No more than approximately 2.87% of the Mortgage Loans in Loan Group 3
        are secured by two- to four-family dwellings. No more than
        approximately 5.27% of the Mortgage Loans in Loan Group 3 are secured
        by low-rise condominium units. No more than approximately 0.33% of the
        Mortgage Loans in Loan Group 3 are secured by high-rise condominium
        units. No more than approximately 0.25% of the Mortgage Loans in Loan
        Group 3 are secured by manufacturing housing. No more than
        approximately 15.68% of the Mortgage Loans in Loan Group 3 are secured
        by PUDs.

                       (33) Each Mortgage Loan in Loan Group 1 was originated
        on or after October 10, 2003, each Mortgage Loan in Loan Group 2 was
        originated on or after July 31, 2004 and each Mortgage Loan in Loan
        Group 3 was originated on or after March 30, 2001.

                       (34) Each Mortgage Loan that is an Adjustable Rate
        Mortgage Loan, other than a Two-Year Hybrid Mortgage Loan or a
        Three-Year Hybrid Mortgage Loan, had an initial Adjustment Date no
        later than May 1, 2005; each Mortgage Loan that is a Two-Year Hybrid
        Mortgage Loan had an initial Adjustment Date no later than December 1,
        2005; and each Mortgage Loan that is a Three-Year Hybrid Mortgage Loan
        had an initial Adjustment Date no later than December 1, 2007.

                       (35) Approximately 78.53% of the Mortgage Loans in Loan
        Group 1, approximately 68.64% of the Mortgage Loans in Loan Group 2
        and approximately 71.83% of the Mortgage Loans in Loan Group 3 provide
        for a prepayment penalty.

                       (36) On the basis of representations made by the
        Mortgagors in their loan applications, no more than approximately
        1.82%, 0.93% and 0.68% of the Mortgage Loans in Loan Group 1, Loan
        Group 2 and Loan Group 3, respectively, are secured by investor
        properties, and no less than approximately 97.74%, 98.50%, and 98.84%
        of the Mortgage Loans in Loan Group 1, Loan Group 2 and Loan Group 3
        respectively, are secured by owner-occupied Mortgaged Properties that
        are primary residences.

                       (37) At the Cut-off Date, the improvements upon each
        Mortgaged Property are covered by a valid and existing hazard
        insurance policy with a generally acceptable carrier that provides for
        fire and extended coverage and coverage for such other hazards as are
        customary in the area where the Mortgaged Property is located in an
        amount that is at least 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 of such policy
        shall be sufficient to prevent the Mortgagor and/or the mortgagee from
        becoming a co-insurer. If the Mortgaged Property is a condominium
        unit, it is included under the



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<PAGE>

        coverage afforded by a blanket policy for the condominium unit. All
        such individual insurance policies and all flood policies referred to
        in item (38) below contain a standard mortgagee clause naming the
        applicable Seller or the original mortgagee, and its successors in
        interest, as mortgagee, and the applicable Seller has received no
        notice that any premiums due and payable thereon have not been paid;
        the Mortgage obligates the Mortgagor thereunder to maintain all such
        insurance, including flood insurance, at the Mortgagor's cost and
        expense, and upon the Mortgagor's failure to do so, authorizes the
        Holder of the Mortgage to obtain and maintain such insurance at the
        Mortgagor's cost and expense and to seek reimbursement therefor from
        the Mortgagor.

                       (38) If the Mortgaged Property is in an area identified
        in the Federal Register by the Federal Emergency Management Agency as
        having special flood hazards, a flood insurance policy in a form
        meeting the requirements of the current guidelines of the Flood
        Insurance Administration is in effect with respect to such Mortgaged
        Property with a generally acceptable carrier in an amount representing
        coverage not less than the least of (A) the original outstanding
        principal balance of the Mortgage Loan, (B) the minimum amount
        required to compensate for damage or loss on a replacement cost basis,
        or (C) the maximum amount of insurance that is available under the
        Flood Disaster Protection Act of 1973, as amended.

                       (39) To the best of CHL's knowledge, there is no
        proceeding occurring, pending or threatened for the total or partial
        condemnation of the Mortgaged Property.

                       (40) There is no material monetary default existing
        under any Mortgage or the related Mortgage Note and, to the best of
        CHL's knowledge, there is no material event that, with the passage of
        time or with notice and the expiration of any grace or cure period,
        would constitute a default, breach, violation or event of acceleration
        under the Mortgage or the related Mortgage Note; and neither Seller
        has waived any default, breach, violation or event of acceleration.

                       (41) Each Mortgaged Property is improved by a one- to
        four-family residential dwelling, including condominium units and
        dwelling units in PUDs. To the best of CHL's knowledge, no improvement
        to a Mortgaged Property includes a cooperative or a mobile home or
        constitutes other than real property under state law.

                       (42) Each Mortgage Loan is being serviced by the Master
        Servicer.

                       (43) Any future advances made prior to the Cut-off Date
        have been consolidated with the outstanding principal amount secured
        by the Mortgage, and the secured principal amount, as consolidated,
        bears a single interest rate and single repayment term reflected on
        the Mortgage Loan Schedule. The consolidated principal amount does not
        exceed the original principal amount of the Mortgage Loan. The
        Mortgage Note does not permit or obligate the Master Servicer to make
        future advances to the Mortgagor at the option of the Mortgagor.

                       (44) All taxes, governmental assessments, insurance
        premiums, water, sewer and municipal charges, leasehold payments or
        ground rents that previously became



                                      74
<PAGE>

        due and owing have been paid, or an escrow of funds has been
        established in an amount sufficient to pay for every such item that
        remains unpaid and that has been assessed, but is not yet due and
        payable. Except for (A) payments in the nature of escrow payments, and
        (B) interest accruing from the date of the Mortgage Note or date of
        disbursement of the Mortgage proceeds, whichever is later, to the day
        that precedes by one month the Due Date of the first installment of
        principal and interest, including without limitation, taxes and
        insurance payments, the Master Servicer has not advanced funds, or
        induced, solicited or knowingly received any advance of funds by a
        party other than the Mortgagor, directly or indirectly, for the
        payment of any amount required by the Mortgage.

                       (45) The Mortgage Loans originated by CHL were
        underwritten in all material respects in accordance with CHL's
        underwriting guidelines for credit blemished quality mortgage loans
        or, with respect to Mortgage Loans purchased by CHL were underwritten
        in all material respects in accordance with customary and prudent
        underwriting guidelines generally used by originators of credit
        blemished quality mortgage loans.

                       (46) Prior to the approval of the Mortgage Loan
        application, an appraisal of the related Mortgaged Property was
        obtained from a qualified appraiser, duly appointed by the originator,
        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; such
        appraisal is in a form acceptable to Fannie Mae and Freddie Mac.

                       (47) None of the Mortgage Loans is a graduated payment
        mortgage loan or a growing equity mortgage loan, and no Mortgage Loan
        is subject to a buydown or similar arrangement.

                       (48) The Mortgage Rates borne by the Mortgage Loans in
        Loan Group 1 as of the Cut-off Date ranged from 5.375% per annum to
        11.580% per annum and the weighted average Mortgage Rate as of the
        Cut-off Date was 6.946% per annum. The Mortgage Rates borne by the
        Mortgage Loans in Loan Group 2 as of the Cut-off Date ranged from
        4.000% per annum to 12.000% per annum and the weighted average
        Mortgage Rate of such Mortgage Loans as of the Cut-off Date was 6.980%
        per annum. The Mortgage Rates borne by the Mortgage Loans in Loan
        Group 3 as of the Cut-off Date ranged from 4.700% per annum to 12.000%
        per annum and the weighted average Mortgage Rate of such Mortgage
        Loans as of the Cut-off Date was 7.257% per annum.

                       (49) As of the Closing Date, no Mortgaged Property has
        been damaged by the hurricanes which struck the southeastern United
        States in August and September of 2004 in a manner which materially
        affects the value of such Mortgaged Property. For purposes of
        clarification, any damage to a Mortgaged Property occurring after the
        Closing Date as a result of the hurricanes referred to in the
        preceding sentence or any other hurricane, tornado or casualty shall
        not result in a breach of the preceding representation and warranty.



                                      75
<PAGE>

                       (50) The Mortgage Loans were selected from among the
        outstanding one- to four-family mortgage loans in the applicable
        Seller's portfolio at the Closing Date as to which the representations
        and warranties made as to the Mortgage Loans set forth in Sections
        2.03(b) and 2.03(c) can be made. No selection was made in a manner
        that would adversely affect the interests of Certificateholders.

                       (51) The Gross Margins on the Mortgage Loans in Loan
        Group 2 range from approximately 3.000% to 8.000%, and the weighted
        average Gross Margin on such Mortgage Loans was approximately 6.313%.
        The Gross Margins on the Mortgage Loans in Loan Group 3 range from
        approximately 2.060% to 11.380%, and the weighted average Gross Margin
        on such Mortgage Loans was approximately 7.028%.

                       (52) Each of the Mortgage Loans in the Mortgage Pool
        has a Due Date on or before January 1, 2005.

                       (53) The Mortgage Loans, individually and in the
        aggregate, conform in all material respects to the descriptions
        thereof in the Prospectus Supplement.

                       (54) There is no obligation on the part of either
        Seller under the terms of the Mortgage or related Mortgage Note to
        make payments in addition to those made by the Mortgagor.

                       (55) Any leasehold estate securing a Mortgage Loan has
        a term of not less than five years in excess of the term of the
        related Mortgage Loan.

                       (56) Each Mortgage Loan represents a "qualified
        mortgage" within the meaning of Section 860(a)(3) of the Code (but
        without regard to the rule in Treasury Regulation ss. 1.860G-2(f)(2)
        that treats a defective obligation as a qualified mortgage, or any
        substantially similar successor provision) and applicable Treasury
        regulations promulgated thereunder.

                       (57) No Mortgage Loan was either a "consumer credit
        contract" or a "purchase money loan" as such terms are defined in 16
        C.F.R. ss. 433 nor is any Mortgage Loan a "mortgage" as defined in 15
        U.S.C. ss. 1602(aa).

                       (58) To the extent required under applicable law, each
        originator and subsequent mortgagee or servicer of the Mortgage Loan
        complied with all licensing requirements and was authorized to
        transact and do business in the jurisdiction in which the related
        Mortgaged Property is located at all times when it held or serviced
        the Mortgage Loan. Any and all requirements of any federal, state or
        local laws or regulations, including, without limitation, usury,
        truth-in-lending, real estate settlement procedures, consumer credit
        protection, anti-predatory lending, fair credit reporting, unfair
        collection practice, equal credit opportunity, fair housing and
        disclosure laws and regulations, applicable to the solicitation,
        origination, collection and servicing of such Mortgage Loan have been
        complied with in all material respects; and any obligations of the
        Holder of the Mortgage Note, Mortgage and other loan documents have
        been complied with in all material respects; servicing of each
        Mortgage Loan has been in accordance with prudent mortgage servicing
        standards, any applicable laws, rules and



                                      76
<PAGE>

        regulations and in accordance with the terms of the Mortgage Notes,
        Mortgage and other loan documents, whether such origination and
        servicing was done by the applicable Seller, its affiliates, or any
        third party which originated the Mortgage Loan on behalf of, or sold
        the Mortgage Loan to, any of them, or any servicing agent of any of
        the foregoing.

                       (59) The methodology used in underwriting the extension
        of credit for the 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.

                       (60) 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;

                       (61) If the Mortgage Loan provides that the interest
        rate on the principal balance of the related Mortgage Loan may be
        adjusted, all of the terms of the related Mortgage pertaining to
        interest rate adjustments, payment adjustments and adjustments of the
        outstanding principal balance have been made in accordance with the
        terms of the related Mortgage Note and applicable law and are
        enforceable and such adjustments will not affect the priority of the
        Mortgage lien;

                       (62) The Mortgaged Property complies with all
        applicable laws, rules and regulations relating to environmental
        matters, including but not limited to those relating to radon,
        asbestos and lead paint and neither Seller nor, to the best of CHL's
        knowledge, the Mortgagor, has received any notice of any violation or
        potential violation of such law;

                       (63) There is no action, suit or proceeding pending, or
        to the best of CHL's knowledge, threatened or likely to be asserted
        with respect to the Mortgage Loan against or affecting either Seller
        before or by any court, administrative agency, arbitrator or
        governmental body;

                       (64) No action, inaction, or event has occurred and no
        state of fact exists or has existed that has resulted or will result
        in the exclusion from, denial of, or defense to coverage under any
        applicable hazard insurance policy, irrespective of the cause of such
        failure of coverage. In connection with the placement of any such
        insurance, no commission, fee, or other compensation has been or will
        be received by CHL or any designee of CHL or any corporation in which
        CHL or any officer, director, or employee had a financial interest at
        the time of placement of such insurance;

                       (65) Each Mortgage Loan has a fully assignable life of
        loan tax service contract which may be assigned without the payment of
        any fee;



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                       (66) No Mortgagor has notified CHL or the Master
        Servicer on CHL's behalf, and CHL has no knowledge, of any relief
        requested or allowed to a Mortgagor under the Relief Act;

                       (67) Each Mortgage Loan was originated by a savings and
        loan association, savings bank, commercial bank, credit union,
        insurance company, or mortgage banking company which is supervised and
        examined by a federal or state authority, or by a mortgagee approved
        by the Secretary of Housing and Urban Development pursuant to Sections
        2.03 and 2.11 of the National Housing Act;

                       (68) Each Mortgage Loan was (A) originated no earlier
        than six months prior to the time the applicable Seller purchased such
        Mortgage Loan pursuant to a mortgage loan purchase agreement or other
        similar agreement and (B) underwritten or reunderwritten by the
        applicable Seller in accordance with the applicable Seller's
        underwriting guidelines in effect at the time the loan was
        underwritten or reunderwritten, as applicable;

                       (69) Each Mortgage Loan, at the time it was originated
        and as of the Closing Date, as applicable, complied in all material
        respects with applicable local, state and federal laws, including, but
        not limited to, all predatory and abusive lending laws;

                       (70) None of the Mortgage Loans is a "high cost"
        mortgage loan as defined by applicable federal, state and local
        predatory and abusive lending laws;

                       (71) Each Prepayment Charge is enforceable and was
        originated in compliance with all applicable federal, state and local
        laws;

                       (72) None of the Mortgage Loans that are secured by
        property located in the State of Illinois are in violation of the
        provisions of the Illinois Interest Act; 815 Ill. Comp. Stat. 205/0.01
        (2004);

                       (73) There is no Mortgage Loan in the Trust Fund that
        was originated on or after March 7, 2003, which is a "high cost home
        loan" as defined under the Georgia Fair Lending Act;

                       (74) No Mortgage Loan in the Trust Fund is a High Cost
        Loan or Covered Loan, as applicable (as such terms are defined in the
        then-current Standard & Poor's LEVELS(R) Glossary which is now Version
        5.6 Revised, Appendix E) and no Mortgage Loan originated on or after
        October 1, 2002 through March 6, 2003 is governed by the Georgia Fair
        Lending Act;

                       (75) Each Mortgage Loan is secured by a "single family
        residence" within the meaning of Section 25(e)(10) of the Internal
        Revenue Code of 1986 (as amended) (the "Code"). The fair market value
        of the manufactured home securing each Mortgage Loan was at least
        equal to 80% of the adjusted issue price of the contract at either (i)
        the time the contract was originated (determined pursuant to the REMIC
        Provisions) or (ii) the time the contract is transferred to the
        purchaser. Each Mortgage Loan is a "qualified mortgage" under Section
        860G(a)(3) of the Code; and



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                       (76) Representations and Warranties relating to the
        Mortgage Loans in Loan Group 2:

                        (i) No Mortgage Loan in Loan Group 2 has an original
                principal balance that exceeds Fannie Mae's conforming loan
                limits as specified in Part 1, Section 310 of Fannie Mae's
                Selling Guide;

                        (ii) Each Mortgage Loan in Loan Group 2 is in
                compliance with the anti-predatory lending eligibility for
                purchase requirements of Fannie Mae's Selling Guide;

                        (iii) No Mortgage Loan in Loan Group 2 is subject to
                the requirements of the Home Ownership and Equity Protection
                Act of 1994 ("HOEPA");

                        (iv) Each Mortgage Loan in Loan Group 2 at the time it
                was made complied in all material respects with applicable
                local, state, and federal laws, including, but not limited to,
                all applicable predatory and abusive lending laws;

                        (v) No Mortgage Loan in Loan Group 2 is a "High-Cost
                Home Loan" as defined in the Georgia Fair Lending Act, as
                amended (the "Georgia Act"). No Mortgage Loan in Loan Group 2
                subject to the Georgia Act and secured by owner occupied real
                property or an owner occupied manufactured home located in the
                State of Georgia was originated (or modified) on or after
                October 1, 2002 through and including March 6, 2003;

                        (vi) No Mortgage Loan in Loan Group 2 is a "High-Cost
                Home Loan" as defined in New York Banking Law 6-1;

                        (vii) No Mortgage Loan in Loan Group 2 is a "High-Cost
                Home Loan" as defined in the Arkansas Home Loan Protection Act
                effective July 16, 2003 (Act 1340 of 2003);

                        (viii) No Mortgage Loan in Loan Group 2 is a
                "High-Cost Home Loan" as defined in the Kentucky high-cost
                home loan statute effective June 24, 2003 (Ky. Rev. Stat.
                Section 360.100);

                        (ix) No Mortgage Loan in Loan Group 2 is a "High-Cost
                Home Loan" as defined in the New Jersey Home Ownership Act
                effective November 27, 2003 (N.J.S.A. 46:10B-22 et seq.);

                        (x) No Mortgage Loan in Loan Group 2 is a "High-Cost
                Home Loan" as defined in the New Mexico Home Loan Protection
                Act effective January 1, 2004 (N.M. Stat. Ann. ss.ss. 58-21A-1
                et seq.);

                        (xi) No Mortgage Loan in Loan Group 2 is a "High-Risk
                Home Loan" as defined in the Illinois High-Risk Home Loan Act
                effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et
                seq.);



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                        (xii) No Mortgage Loan in Loan Group 2 is a "High-Cost
                Home Mortgage Loan" as defined in the Massachusetts Predatory
                Home Loan Practices Act, effective November 6, 2004 (Mass.
                Ann. Laws Ch. 183C);

                        (xiii) No borrower related to a Mortgage Loan in Loan
                Group 2 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 such 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
                such Mortgage Loan's originator. If, at the time of loan
                application, the borrower may have qualified for a 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;

                        (xiv) The methodology used in underwriting the
                extension of credit for each Mortgage Loan in Loan Group 2
                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 such Mortgage
                Loan;

                        (xv) With respect to any Mortgage Loan in Loan Group 2
                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, (iv)
                for loans originated on or after September 1, 2004, the
                duration of the prepayment period shall not exceed three (3)
                years from the date of the note, unless the loan was modified
                to reduce the prepayment period to no more than three years
                from the date of the note and the borrower was notified in
                writing of such reduction in prepayment period, and (v)
                notwithstanding any state or federal law to the contrary, the
                Master 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;

                        (xvi) No borrower related to a Mortgage Loan in Loan
                Group 2 was required to purchase any credit life, disability,
                accident or health insurance product as a condition of
                obtaining the extension of credit. No borrower related to a
                Mortgage Loan in Loan Group 2 obtained a prepaid
                single-premium credit life, disability, accident or health
                insurance policy in connection with the origination of the
                Mortgage Loan in Loan Group 2; No proceeds from any



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                Mortgage Loan in Loan Group 2 were used to purchase single
                premium credit insurance policies as part of the origination
                of, or as a condition to closing, such Mortgage Loan;

                        (xvii) All points and fees related to each Mortgage
                Loan in Loan Group 2 were disclosed in writing to the borrower
                in accordance with applicable state and federal law and
                regulation. Except in the case of a Mortgage Loan in Loan
                Group 2 in an original principal amount of less than $60,000
                which would have resulted in an unprofitable origination, no
                borrower was charged "points and fees" (whether or not
                financed) in an amount greater than 5% of the principal amount
                of such loan, such 5% limitation is calculated in accordance
                with Fannie Mae's anti-predatory lending requirements as set
                forth in the Fannie Mae Selling Guide;

                        (xviii) All fees and charges (including finance
                charges) and whether or not financed, assessed, collected or
                to be collected in connection with the origination and
                servicing of each Mortgage Loan in Loan Group 2 has been
                disclosed in writing to the borrower in accordance with
                applicable state and federal law and regulation;

                        (xix) No Mortgage Loan in Loan Group 2 had a
                Loan-to-Value Ratio as of the Cut-off Date in excess of
                100.00%;

                        (xx) A Credit Bureau Risk Score was obtained in
                connection with the origination of each Mortgage Loan in Loan
                Group 2 and no Credit Bureau Risk Score for any Mortgage Loan
                in Loan Group 2 was less than 500;

                        (xxi) No Mortgage Loan in Loan Group 2 has a current
                Mortgage Rate in excess of 13.00% per annum;

                        (xxii) No Mortgage Loan in Loan Group 2 has a Minimum
                Mortgage Rate in excess of 13.00% per annum;

                        (xxiii) No Mortgage Loan in Loan Group 2 has a Minimum
                Mortgage Rate in excess of the original Mortgage Rate;

                        (xxiv) No Mortgage Loan in Loan Group 2 has a Gross
                Margin in excess of 8.00% per annum;

                        (xxv) No Mortgaged Property consists of more than four
                units;

                        (xxvi) No Mortgage Loan in Loan Group 2 was 30 days
                Delinquent more than once during the twelve months immediately
                preceding the Cut-off Date; and

                        (xxvii) The aggregate Cut-off Date Principal Balance
                of all Group 2 Mortgage Loans that (i) provide for payments of
                interest only during a portion of the life of such Mortgage
                Loans and (ii) have a Credit Bureau Risk Score of less



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                than 620 does not exceed 10% of the aggregate Cut-off Date
                Principal Balance of the Group 2 Mortgage Loans.

               (c) The Liquidity Trust hereby represents and warrants to the
Depositor and the Trustee as follows, as of the Cut-off Date:

                       (1) The Liquidity Trust is duly organized as a Delaware
        limited liability company and is validly existing and in good standing
        under the laws of the State of Delaware and is duly authorized and
        qualified to transact any and all business contemplated by this
        Agreement to be conducted by the Liquidity Trust in any state in which
        a Mortgaged Property securing a Liquidity Trust Mortgage Loan is
        located or is otherwise not required under applicable law to effect
        such qualification and, in any event, is in compliance with the doing
        business laws of any such state, to the extent necessary to ensure its
        ability to enforce each Liquidity Trust Mortgage Loan, to sell the
        Liquidity Trust Mortgage Loans in accordance with the terms of this
        Agreement and to perform any of its other obligations under this
        Agreement in accordance with the terms hereof.

                       (2) The Liquidity Trust has the full company power and
        authority to sell each Liquidity Trust Mortgage Loan, and to execute,
        deliver and perform, and to enter into and consummate the transactions
        contemplated by this Agreement and has duly authorized by all
        necessary company action on the part of the Liquidity Trust the
        execution, delivery and performance of this Agreement; and this
        Agreement, assuming the due authorization, execution and delivery
        hereof by the other parties hereto, constitutes a legal, valid and
        binding obligation of the Liquidity Trust, enforceable against the
        Liquidity Trust in accordance with its terms, except that (a) the
        enforceability hereof may be limited by bankruptcy, insolvency,
        moratorium, receivership and other similar laws relating to creditors'
        rights generally and (b) the remedy of specific performance and
        injunctive and other forms of equitable relief may be subject to
        equitable defenses and to the discretion of the court before which any
        proceeding therefor may be brought.

                       (3) The execution and delivery of this Agreement by the
        Liquidity Trust, the sale of the Liquidity Trust Mortgage Loans by the
        Liquidity Trust under this Agreement, the consummation of any other of
        the transactions contemplated by this Agreement, and the fulfillment
        of or compliance with the terms hereof are in the ordinary course of
        business of the Liquidity Trust and will not (A) result in a material
        breach of any term or provision of the certificate of formation or
        limited liability company agreement of the Liquidity Trust or (B)
        materially conflict with, result in a material breach, violation or
        acceleration of, or result in a material default under, the terms of
        any other material agreement or instrument to which the Liquidity
        Trust is a party or by which it may be bound, or (C) constitute a
        material violation of any statute, order or regulation applicable to
        the Liquidity Trust of any court, regulatory body, administrative
        agency or governmental body having jurisdiction over the Liquidity
        Trust; and the Liquidity Trust is not in breach or violation of any
        material indenture or other material agreement or instrument, or in
        violation of any statute, order or regulation of any court, regulatory
        body, administrative agency or governmental body having jurisdiction
        over it



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        which breach or violation may materially impair the Liquidity Trust's
        ability to perform or meet any of its obligations under this
        Agreement.

                       (4) No litigation is pending or, to the best of the
        Liquidity Trust's knowledge, threatened, against the Liquidity Trust
        that would materially and adversely affect the execution, delivery or
        enforceability of this Agreement or the ability of the Liquidity Trust
        to sell the Liquidity Trust Mortgage Loans or to perform any of its
        other obligations under this Agreement in accordance with the terms
        hereof.

                       (5) No consent, approval, authorization or order of any
        court or governmental agency or body is required for the execution,
        delivery and performance by the Liquidity Trust of, or compliance by
        the Liquidity Trust with, this Agreement or the consummation of the
        transactions contemplated hereby, or if any such consent, approval,
        authorization or order is required, the Liquidity Trust has obtained
        the same.

                       (6) The Liquidity Trust will treat the transfer of the
        Liquidity Trust Mortgage Loans to the Depositor as a sale of the
        Liquidity Trust Mortgage Loans for all tax, accounting and regulatory
        purposes.

                       (7) Immediately prior to the assignment of each
        Liquidity Trust Mortgage Loan to the Depositor, the Liquidity Trust
        had good title to, and was the sole owner of, such the Liquidity Trust
        Mortgage Loan free and clear of any pledge, lien, encumbrance or
        security interest and had full right and authority, subject to no
        interest or participation of, or agreement with, any other party, to
        sell and assign the same pursuant to this Agreement.

               (d) Upon discovery by any of the parties hereto of a breach of
a representation or warranty set forth in Section 2.03(a) through (c) that
materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties and the NIM Insurer. Each of the Master Servicer
and the Sellers (each, a "Representing Party") hereby covenants with respect
to the representations and warranties set forth in Sections 2.03(a) through
(c) that within 90 days of the earlier of the discovery by such Representing
Party or receipt of written notice by such Representing Party from any party
of a breach of any representation or warranty set forth herein made that
materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan or the Class 1-AV-1 Insurer, it shall cure such breach in
all material respects and, if such breach is not so cured, shall, (i) if such
90-day period expires prior to the second anniversary of the Closing Date,
remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in its place a Replacement Mortgage Loan, in the manner and subject
to the conditions set forth in this Section; or (ii) repurchase the affected
Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the
manner set forth below; provided that (a) any such substitution pursuant to
(i) above or repurchase pursuant to (ii) above shall not be effected prior to
the delivery to the Trustee, of the Opinion of Counsel required by Section
2.05 hereof, (b) any such substitution pursuant to (i) above shall not be
effected prior to the additional delivery to the Trustee of a Request for File
Release and (c) any such substitution pursuant to (i) above shall include a
payment by the applicable Representing Party of any amount as calculated under
item (iii) of the definition of "Purchase Price". Any Representing Party
liable



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for a breach under this Section 2.03 shall promptly reimburse the Master
Servicer or the Trustee for any expenses reasonably incurred by the Master
Servicer or the Trustee in respect of enforcing the remedies for such breach.
To enable the Master Servicer to amend the Mortgage Loan Schedule, any
Representing Party liable for a breach under this Section 2.03 shall, unless
it cures such breach in a timely fashion pursuant to this Section 2.03,
promptly notify the Master Servicer whether such Representing Party intends
either to repurchase, or to substitute for, the Mortgage Loan affected by such
breach. With respect to the representations and warranties described in this
Section that are made to the best of the Representing Party's knowledge, if it
is discovered by any of the Depositor, the Master Servicer, the Sellers or the
Trustee that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the related
Mortgage Loan, notwithstanding the Representing Party's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.

               With respect to any Replacement Mortgage Loan or Loans, the
applicable Seller delivering such Replacement Mortgage Loan shall deliver to
the Trustee for the benefit of the Certificateholders the related Mortgage
Note, Mortgage and assignment of the Mortgage, and such other documents and
agreements as are required by Section 2.01, with the Mortgage Note endorsed
and the Mortgage assigned as required by Section 2.01. No substitution will be
made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the Due
Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
applicable Seller delivering such Replacement Loan on such Distribution Date.
For the month of substitution, distributions to Certificateholders will
include the Scheduled Payment due on any Deleted Mortgage Loan for the related
Due Period and thereafter the applicable Seller shall be entitled to retain
all amounts received in respect of such Deleted Mortgage Loan. The Master
Servicer shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and
the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the applicable Seller
delivering such Replacement Mortgage Loan shall be deemed to have made with
respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 2.03(b)
or (c) with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the Certificate Account of the amount required to be deposited
therein in connection with such substitution as described in the following
paragraph, the Co-Trustee shall release to the Representing Party the Mortgage
File relating to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and shall execute and deliver at the Master Servicer's
direction such instruments of transfer or assignment as have been prepared by
the Master Servicer, in each case without recourse, as shall be necessary to
vest in the applicable Seller, or its respective designee, title to the
Trustee's interest in any Deleted Mortgage Loan substituted for pursuant to
this Section 2.03.

               For any month in which either Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution
is less than the Stated Principal Balance (after application of



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the principal portion of the Scheduled Payment due in the month of
substitution) of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such
amount, the "Substitution Adjustment Amount") shall be forwarded by the
applicable Seller to the Master Servicer and deposited by the Master Servicer
into the Certificate Account not later than the Determination Date for the
Distribution Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.

               In the event that a Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate
Account pursuant to Section 3.05 on the Determination Date for the
Distribution Date in the month following the month during which such Seller
became obligated to repurchase or replace such Mortgage Loan and upon such
deposit of the Purchase Price, the delivery of the Opinion of Counsel required
by Section 2.05, if any, and the receipt of a Request for File Release, the
Co-Trustee shall release the related Mortgage File held for the benefit of the
Certificateholders to such Seller, and the Trustee shall execute and deliver
at such Person's direction the related instruments of transfer or assignment
prepared by such Seller, in each case without recourse, as shall be necessary
to transfer title from the Trustee for the benefit of the Certificateholders
and transfer the Trustee's interest to such Seller to any Mortgage Loan
purchased pursuant to this Section 2.03. It is understood and agreed that the
obligation under this Agreement of the Sellers to cure, repurchase or replace
any Mortgage Loan as to which a breach has occurred and is continuing shall
constitute the sole remedy against the Sellers respecting such breach
available to Certificateholders, the Depositor or the Trustee.

               (e) The representations and warranties set forth in this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Co-Trustee for the benefit of the Certificateholders with respect to each
Mortgage Loan.

               Section 2.04 Representations and Warranties of the Depositor.

               The Depositor hereby represents and warrants to the Master
Servicer and the Trustee as follows, as of the date hereof:

                       (1) The Depositor is duly organized and is validly
        existing as a corporation in good standing under the laws of the State
        of Delaware and has full power and authority (corporate and other)
        necessary to own or hold its properties and to conduct its business as
        now conducted by it and to enter into and perform its obligations
        under this Agreement.

                       (2) The Depositor has the full corporate power and
        authority to execute, deliver and perform, and to enter into and
        consummate the transactions contemplated by, this Agreement and has
        duly authorized, by all necessary corporate action on its part, the
        execution, delivery and performance of this Agreement; and this
        Agreement, assuming the due authorization, execution and delivery
        hereof by the other parties hereto, constitutes a legal, valid and
        binding obligation of the Depositor, enforceable against the Depositor
        in accordance with its terms, subject, as to enforceability, to (i)
        bankruptcy, insolvency, reorganization, moratorium and other



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        similar laws affecting creditors' rights generally and (ii) general
        principles of equity, regardless of whether enforcement is sought in a
        proceeding in equity or at law.

                       (3) The execution and delivery of this Agreement by the
        Depositor, the consummation of the transactions contemplated by this
        Agreement, and the fulfillment of or compliance with the terms hereof
        are in the ordinary course of business of the Depositor and will not
        (A) result in a material breach of any term or provision of the
        charter or by-laws of the Depositor or (B) materially conflict with,
        result in a material breach, violation or acceleration of, or result
        in a material default under, the terms of any other material agreement
        or instrument to which the Depositor is a party or by which it may be
        bound or (C) constitute a material violation of any statute, order or
        regulation applicable to the Depositor of any court, regulatory body,
        administrative agency or governmental body having jurisdiction over
        the Depositor; and the Depositor is not in breach or violation of any
        material indenture or other material agreement or instrument, or in
        violation of any statute, order or regulation of any court, regulatory
        body, administrative agency or governmental body having jurisdiction
        over it which breach or violation may materially impair the
        Depositor's ability to perform or meet any of its obligations under
        this Agreement.

                       (4) No litigation is pending, or, to the best of the
        Depositor's knowledge, threatened, against the Depositor that would
        materially and adversely affect the execution, delivery or
        enforceability of this Agreement or the ability of the Depositor to
        perform its obligations under this Agreement in accordance with the
        terms hereof.

                       (5) No consent, approval, authorization or order of any
        court or governmental agency or body is required for the execution,
        delivery and performance by the Depositor of, or compliance by the
        Depositor with, this Agreement or the consummation of the transactions
        contemplated hereby, or if any such consent, approval, authorization
        or order is required, the Depositor has obtained the same.

               The Depositor hereby represents and warrants to the Trustee
with respect to each Mortgage Loan as of the Closing Date, following the
transfer of such Mortgage Loan to it by the Sellers, the Depositor had good
title to such Mortgage Loan, and the related Mortgage Notes were subject to no
offsets, claims, defenses or counterclaims.

               It is understood and agreed that the representations and
warranties set forth in the two immediately preceding paragraphs shall survive
delivery of the Mortgage Files to the Co-Trustee. Upon discovery by the
Depositor or the Trustee, with respect to any Mortgage Loan of a breach of any
of the foregoing representations and warranties set forth in the immediately
preceding paragraph (referred to herein as a "breach"), which breach
materially and adversely affects the interest of the Certificateholders, with
respect to any Mortgage Loan the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency and the NIM
Insurer. The Depositor hereby covenants with respect to the representations
and warranties made by it in this Section 2.04 that within 90 days of the
earlier of the discovery it or receipt of written notice by it from any party
of a breach of any representation or warranty set forth herein made that
materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan, it shall cure such breach in all material respects and, if
such breach is not so



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cured, shall repurchase or replace the affected Mortgage Loan or Loans in
accordance with the procedure set forth in Section 2.03(d).

               Section 2.05 Delivery of Opinion of Counsel in Connection with
                            Substitutions and Repurchases.

               (a) Notwithstanding any contrary provision of this Agreement,
with respect to any Mortgage Loan that is not in default or as to which
default is not imminent, no repurchase or substitution pursuant to Sections
2.02, 2.03 or 2.04 shall be made unless the Representing Party making such
repurchase or substitution delivers to the Trustee an Opinion of Counsel
(which such Representing Party shall use reasonable efforts to obtain)
addressed to the Trustee to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of the Trust Fund or contributions after the Closing Date, as defined in
sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause the
any REMIC formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which repurchase or
substitution was delayed pursuant to this paragraph shall be repurchased or
the substitution therefor shall occur (subject to compliance with Sections
2.02, 2.03 or 2.04) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such loan and (b) receipt by the Trustee of
an Opinion of Counsel to the effect that such repurchase or substitution, as
applicable, will not result in the events described in clause (i) or clause
(ii) of the preceding sentence.

               (b) Upon discovery by the Depositor, either Seller, the Master
Servicer or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of section 860G(a)(3) of the Code, the
party discovering such fact shall promptly (and in any event within five
Business Days of discovery) give written notice thereof to the other parties
and the NIM Insurer. In connection therewith, the Trustee shall require CHL,
at CHL's option, to either (i) substitute, if the conditions in Section
2.03(d) with respect to substitutions are satisfied, a Replacement Mortgage
Loan for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage
Loan within 90 days of such discovery in the same manner as it would a
Mortgage Loan for a breach of representation or warranty contained in Section
2.03. The Trustee shall reconvey to CHL the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as
it would a Mortgage Loan repurchased for breach of a representation or
warranty contained in Section 2.03.

               Section 2.06 Authentication and Delivery of Certificates.

               The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has
executed, authenticated and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership
of the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.



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               Section 2.07 Covenants of the Master Servicer.

               The Master Servicer hereby covenants to the Depositor and the
Trustee as follows:

               (a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and

               (b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the Depositor,
any affiliate of the Depositor or the Trustee and prepared by the Master
Servicer pursuant to this Agreement will contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
information, certificate, statement or report not misleading.

                                 ARTICLE III.
                ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

               Section 3.01 Master Servicer to Service Mortgage Loans.

               For and on behalf of the Certificateholders, the Master
Servicer shall service and administer the Mortgage Loans in accordance with
customary and usual standards of practice of prudent mortgage loan lenders in
the respective states in which the Mortgaged Properties are located, including
taking all required and appropriate actions under each Required Insurance
Policy. In connection with such servicing and administration, the Master
Servicer shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.02 hereof, subject to the terms hereof
(i) to execute and deliver, on behalf of the Certificateholders and the
Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages (but only in the manner provided in this
Agreement), (iii) to collect any Insurance Proceeds, other Liquidation
Proceeds and Subsequent Recoveries, and (iv) subject to Section 3.12(b), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that the Master Servicer shall
take no action that is inconsistent with or prejudices the interests of the
Trustee or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor and the Trustee under this Agreement. The Master
Servicer shall represent and protect the interest of the Trustee in the same
manner as it currently protects its own interest in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan and
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan which would (i) cause any REMIC formed hereunder to fail to
qualify as a REMIC or (ii) result in the imposition of any tax under section
860(a) or 860(d) of the Code, but in any case the Master Servicer shall not
act in any manner that is a lesser standard than that provided in the first
sentence of this Section 3.01. Without limiting the generality of the
foregoing, the Master Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Master Servicer believes it appropriate in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or



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discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of
the Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery
by any or all of them as are necessary or appropriate to enable the Master
Servicer to service and administer the Mortgage Loans. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Master Servicer. The Master Servicer further is authorized
and empowered by the Trustee, on behalf of the Certificateholders and the
Trustee, in its own name or in the name of the Subservicer, when the Master
Servicer or the Subservicer, as the case may be, believes it appropriate in
its best judgment to register any Mortgage Loan on the MERS(R) System, or
cause the removal from the registration of any Mortgage Loan on the MERS(R)
System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording
of a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns.

               In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary
for the purpose of effecting the payment of taxes and assessments on the
Mortgaged Properties, which advances shall be reimbursable in the first
instance from related collections from the Mortgagors pursuant to Section
3.06, and further as provided in Section 3.08. All costs incurred by the
Master Servicer, if any, in effecting the timely payments of taxes and
assessments on the Mortgaged Properties and related insurance premiums shall
not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balance under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so
permit.

               The Master Servicer shall deliver a list of Servicing Officers
to the Trustee by the Closing Date.

               In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present, on behalf of itself,
the Trustee and the Certificateholders, claims to the insurer under any
primary insurance policies and, in this regard, to take any reasonable action
necessary to permit recovery under any primary insurance policies respecting
defaulted Mortgage Loans. Any amounts collected by the Master Servicer under
any primary insurance policies shall be deposited in the Certificate Account.

               In the event that a shortfall in any collection on or liability
with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Scheduled Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the
terms of the related Mortgage Note and this Agreement, the Master Servicer,
upon discovery or receipt of notice thereof, immediately shall deliver to the
Trustee for deposit in the Distribution Account from its own funds the amount
of any such shortfall and shall indemnify and hold harmless the Trust Fund,
the Trustee, the Depositor and any successor master servicer in respect of any
such liability. Such indemnities shall survive the termination or discharge of
this Agreement. Notwithstanding the foregoing, this Section 3.01 shall not
limit the ability of the Master Servicer to seek recovery of any such amounts
from the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law and shall not be an expense of the Trust.



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               Section 3.02 Subservicing; Enforcement of the Obligations of
                            Master Servicer.

               (a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that (i)
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder, (ii) that
such subservicing agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the ratings on any Class of Certificates (without
regard to the Class 1-AV-1 Policy, in the case of the Class 1-AV-1
Certificates), as evidenced by a letter to that effect delivered by each
Rating Agency to the Depositor and the NIM Insurer and (iii) the NIM Insurer
shall have consented to such subservicing agreements (which consent shall not
be unreasonably withheld) with Subservicers, for the servicing and
administration of the Mortgage Loans. The Master Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments. The Master Servicer, with the written consent of
the NIM Insurer (which consent shall not be unreasonably withheld), shall be
entitled to terminate any Subservicing Agreement and the rights and
obligations of any Subservicer pursuant to any Subservicing Agreement in
accordance with the terms and conditions of such Subservicing Agreement.
Notwithstanding the provisions of any subservicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between
the Master Servicer or a subservicer or reference to actions taken through a
Master Servicer or otherwise, the Master Servicer shall remain obligated and
liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or
liability by virtue of such subservicing agreements or arrangements or by
virtue of indemnification from the subservicer and to the same extent and
under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. Every subservicing agreement
entered into by the Master Servicer shall contain a provision giving the
successor Master Servicer the option to terminate such agreement without cost
in the event a successor Master Servicer is appointed. All actions of each
subservicer performed pursuant to the related subservicing agreement shall be
performed as an agent of the Master Servicer with the same force and effect as
if performed directly by the Master Servicer.

               (b) For purposes of this Agreement, the Master Servicer shall
be deemed to have received any collections, recoveries or payments with
respect to the Mortgage Loans that are received by a subservicer regardless of
whether such payments are remitted by the subservicer to the Master Servicer.

               Section 3.03 Rights of the Depositor, the Sellers, the
                            Certificateholders, the NIM Insurer, the Class
                            1-AV-1 Insurer and the Trustee in Respect of the
                            Master Servicer.

               None of the Trustee, the Sellers, the Certificateholders, the
NIM Insurer, the Class 1-AV-1 Insurer or the Depositor shall have any
responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise. The Master Servicer shall afford (and
any





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Subservicing Agreement shall provide that each Subservicer shall afford) the
Depositor, the NIM Insurer, the Class 1-AV-1 Insurer and the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer (and any such Subservicer) in respect of the
Master Servicer's rights and obligations hereunder and access to officers of
the Master Servicer (and those of any such Subservicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor,
the NIM Insurer, the Class 1-AV-1 Insurer and the Trustee its (and any such
Subservicer's) most recent financial statements and such other information
relating to the Master Servicer's capacity to perform its obligations under
this Agreement that it possesses. To the extent such information is not
otherwise available to the public, the Depositor, the NIM Insurer, the Class
1-AV-1 Insurer and the Trustee shall not disseminate any information obtained
pursuant to the preceding two sentences without the Masters Servicer's (or any
such Subservicer's) written consent, except as required pursuant to this
Agreement or to the extent that it is necessary to do so (i) in working with
legal counsel, auditors, taxing authorities or other governmental agencies,
rating agencies or reinsurers or (ii) pursuant to any law, rule, regulation,
order, judgment, writ, injunction or decree of any court or governmental
authority having jurisdiction over the Depositor, the Trustee, the NIM
Insurer, the Class 1-AV-1 Insurer or the Trust Fund, and in either case, the
Depositor, the NIM Insurer, the Class 1-AV-1 Insurer or the Trustee, as the
case may be, shall use its reasonable best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under
this Agreement or exercise the rights of the Master Servicer under this
Agreement; provided by virtue of such performance by the Depositor of its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

               Section 3.04 Trustee to Act as Master Servicer.

               In the event that the Master Servicer shall for any reason no
longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Master Servicer hereunder arising thereafter (except
that the Trustee shall not be (i) liable for losses of the Master Servicer
pursuant to Section 3.10 hereof or any acts or omissions of the predecessor
Master Servicer hereunder, (ii) obligated to make Advances if it is prohibited
from doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02
or 2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant
to Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of
Section 6.02 hereof). If the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default), the Trustee
(or any other successor servicer) may, at its option, succeed to any rights
and obligations of the Master Servicer under any subservicing agreement in
accordance with the terms thereof; provided that the Trustee (or any other
successor servicer) shall not incur any liability or have any obligations in
its capacity as servicer under a subservicing agreement arising prior to the
date of such succession unless it expressly elects to succeed to the rights
and obligations of the Master Servicer thereunder; and the Master Servicer
shall not thereby be



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relieved of any liability or obligations under the subservicing agreement
arising prior to the date of such succession.

               The Master Servicer shall, upon request of the Trustee, but at
the expense of the Master Servicer, deliver to the assuming party all
documents and records relating to each subservicing agreement and the Mortgage
Loans then being serviced thereunder and an accounting of amounts collected
held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the subservicing agreement to the assuming party.

               Section 3.05 Collection of Mortgage Loan Payments; Certificate
                            Account; Distribution Account; Seller Shortfall
                            Interest Requirement.

               (a) The Master Servicer shall make reasonable efforts in
accordance with customary and usual standards of practice of prudent mortgage
lenders in the respective states in which the Mortgaged Properties are located
to collect all payments called for under the terms and provisions of the
Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance
Policy. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive any late payment charge or, subject to Section 3.20, any
Prepayment Charge or penalty interest in connection with the prepayment of a
Mortgage Loan and (ii) extend the due dates for payments due on a Mortgage
Note for a period not greater than 270 days. In the event of any such
arrangement, the Master Servicer shall make Advances on the related Mortgage
Loan during the scheduled period in accordance with the amortization schedule
of such Mortgage Loan without modification thereof by reason of such
arrangements. In addition, the NIM Insurer's prior written consent shall be
required for any waiver of Prepayment Charges or for the extension of the due
dates for payments due on a Mortgage Note, if the aggregate number of
outstanding Mortgage Loans that have been granted such waivers or extensions
exceeds 5% of the aggregate number of Mortgage Loans. The Master Servicer
shall not be required to institute or join in litigation with respect to
collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.

               (b) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to
be deposited on a daily basis within two Business Days of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by Subservicers or received by it in respect of Mortgage Loans
subsequent to the Cut-off Date (other than in respect of principal and
interest due on the Mortgage Loans on or before the Cut-off Date) and the
following amounts required to be deposited hereunder:

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

                           (2) all payments on account of interest on the
        Mortgage Loans (net of the related Servicing Fee and Prepayment
        Interest Excess permitted under Section 3.15 to the extent not
        previously paid to or withheld by the Master Servicer);



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                           (3) all Insurance Proceeds;

                           (4) all Liquidation Proceeds and Subsequent
        Recoveries, other than proceeds to be applied to the restoration or
        repair of the Mortgaged Property or released to the Mortgagor in
        accordance with the Master Servicer's normal servicing procedures;

                           (5) all Compensating Interest;

                           (6) any amount required to be deposited by the
        Master Servicer pursuant to Section 3.05(e) in connection with any
        losses on Permitted Investments;

                           (7) any amounts required to be deposited by the
        Master Servicer pursuant to Section 3.10 hereof;

                           (8) the Purchase Price and any Substitution
        Adjustment Amount;

                           (9) all Advances made by the Master Servicer or the
        Trustee pursuant to Section 4.01;

                           (10) all Prepayment Charges and Master Servicer
        Prepayment Charge Payment Amounts; and

                           (11) any other amounts required to be deposited
        hereunder.

               The foregoing requirements for remittance by the Master
Servicer into the Certificate 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 or assumption fees, if collected, need not
be remitted by the Master Servicer. In the event that the Master Servicer
shall remit any amount not required to be remitted and not otherwise subject
to withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw or
direct the institution maintaining the Certificate Account, to withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the institution maintaining the
Certificate Account, that describes the amounts deposited in error in the
Certificate Account. The Master Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited
in the Certificate Account shall be held in trust for the Certificateholders
until withdrawn in accordance with Section 3.08.

               No later than 1:00 p.m. Pacific time on the Business Day prior
to the Master Servicer Advance Date in December 2004, CHL shall remit to the
Master Servicer, and the Master Servicer shall deposit in the Certificate
Account, the Seller Shortfall Interest Requirement (if any) for such Master
Servicer Advance Date.



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               (c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:

                       (1) the aggregate amount remitted by the Master
        Servicer pursuant to the second paragraph of Section 3.08(a); and

                       (2) any amount required to be deposited by the Master
        Servicer pursuant to Section 3.05(e) in connection with any losses on
        Permitted Investments.

               The foregoing requirements for remittance by the Master
Servicer and deposit by the Trustee into the Distribution Account shall be
exclusive. In the event that the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time direct the Trustee to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering a written
notice to the Trustee that describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08.
In no event shall the Trustee incur liability for withdrawals from the
Distribution Account at the direction of the Master Servicer.

               (d) [Reserved].

               (e) Each institution that maintains the Certificate Account or
the Distribution Account shall invest the funds in each such account, as
directed by the Master Servicer, in Permitted Investments, which shall mature
not later than (x) in the case of the Certificate Account, the second Business
Day next preceding the related Distribution Account Deposit Date (except that
if such Permitted Investment is an obligation of the institution that
maintains such Certificate Account, then such Permitted Investment shall
mature not later than the Business Day next preceding such Distribution
Account Deposit Date) and (y) in the case of the Distribution Account, the
Business Day immediately preceding the first Distribution Date that follows
the date of such investment (except that if such Permitted Investment is an
obligation of the institution that maintains such Distribution Account, then
such Permitted Investment shall mature not later than such Distribution Date),
in each case, shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. In the case of the Certificate Account and
the Distribution Account, all income and gain net of any losses realized from
any such investment shall be for the benefit of the Master Servicer as
servicing compensation and shall be remitted to it monthly as provided herein.
The amount of any losses incurred in the Certificate Account or the
Distribution Account in respect of any such investments shall be deposited by
the Master Servicer in the Certificate Account or paid to the Trustee for
deposit into the Distribution Account out of the Master Servicer's own funds
immediately as realized. The Trustee shall not be liable for the amount of any
loss incurred in respect of any investment or lack of investment of funds held
in the Certificate Account or the Distribution Account and made in accordance
with this Section 3.05.



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               (f) The Master Servicer shall give at least 30 days advance
notice to the Trustee, each Seller, each Rating Agency and the Depositor of
any proposed change of location of the Certificate Account prior to any change
thereof. The Trustee shall give at least 30 days advance notice to the Master
Servicer, each Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account or the Carryover Reserve
Fund prior to any change thereof.

               (g) Except as otherwise expressly provided in this Agreement,
if any default occurs under any Permitted Investment, the Trustee may and,
subject to Sections 8.01 and 8.02(a)(4), at the request of the Holders of
Certificates representing more than 50% of the Voting Rights or the NIM
Insurer, shall take any action appropriate to enforce payment or performance,
including the institution and prosecution of appropriate proceedings.

               Section 3.06 Collection of Taxes, Assessments and Similar
                            Items; Escrow Accounts.

               To the extent required by the related Mortgage Note, the Master
Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors
(or advances by the Master Servicer) for the payment of taxes, assessments,
hazard insurance premiums or comparable items for the account of the
Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.

               Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items,
to reimburse the Master Servicer out of related collections for any payments
made pursuant to Sections 3.01 hereof (with respect to taxes and assessments
and insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account or to clear and
terminate the Escrow Account at the termination of this Agreement in
accordance with Section 9.01 hereof. The Escrow Accounts shall not be a part
of the Trust Fund.

               Section 3.07 Access to Certain Documentation and Information
                            Regarding the Mortgage Loans.

               The Master Servicer shall afford the Depositor, the NIM
Insurer, the Trustee and the Class 1-AV-1 Insurer reasonable access to all
records and documentation regarding such Mortgage Loans and all related
accounts, insurance policies and other matters relating to this Agreement,
such access being afforded without charge, but only upon reasonable request
and during normal business hours at the offices of the Master Servicer
designated by it. Upon request, the Master Servicer shall furnish to the
Trustee and the NIM Insurer its most recent publicly available financial
statements and any other information relating to its capacity to perform its
obligations under this Agreement reasonably requested by the NIM Insurer.



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               Upon reasonable advance notice in writing if required by
federal regulation, the Master Servicer will provide to each Certificateholder
or Certificate Owner that is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder or
Certificate Owner to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates;
provided that the Master Servicer shall be entitled to be reimbursed by each
such Certificateholder or Certificate Owner for actual expenses incurred by
the Master Servicer in providing such reports and access.

               Section 3.08 Permitted Withdrawals from the Certificate
                            Account, Distribution Account, Carryover Reserve
                            Fund and the Principal Reserve Fund.

               (a) The Master Servicer may from time to time make withdrawals
from the Certificate Account for the following purposes:

                        (i) to pay to the Master Servicer (to the extent not
                previously paid to or withheld by the Master Servicer), as
                servicing compensation in accordance with Section 3.15, that
                portion of any payment of interest that equals the Servicing
                Fee for the period with respect to which such interest payment
                was made, and, as additional servicing compensation to the
                Master Servicer, those other amounts set forth in Section
                3.15;

                        (ii) to reimburse each of the Master Servicer and the
                Trustee for Advances made by it with respect to the Mortgage
                Loans, such right of reimbursement pursuant to this subclause
                (ii) being limited to amounts received on particular Mortgage
                Loan(s) (including, for this purpose, Liquidation Proceeds,
                Insurance Proceeds and Subsequent Recoveries) that represent
                late recoveries of payments of principal and/or interest on
                such particular Mortgage Loan(s) in respect of which any such
                Advance was made;

                        (iii) [Reserved];

                        (iv) to reimburse each of the Master Servicer and the
                Trustee for any Nonrecoverable Advance previously made;

                        (v) to reimburse the Master Servicer from Insurance
                Proceeds for Insured Expenses covered by the related Insurance
                Policy;

                        (vi) to pay the Master Servicer any unpaid Servicing
                Fees and to reimburse it for any unreimbursed Servicing
                Advances, the Master Servicer's right to reimbursement of
                Servicing Advances pursuant to this subclause (vi) with
                respect to any Mortgage Loan being limited to amounts received
                on particular Mortgage Loan(s) (including, for this purpose,
                Liquidation Proceeds, Insurance Proceeds and Subsequent
                Recoveries and purchase and repurchase proceeds) that
                represent late recoveries of the payments for which such
                advances were made pursuant to Section 3.01 or Section 3.06;



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                        (vii) to pay to the applicable Seller, the Depositor
                or the Master Servicer, as applicable, with respect to each
                Mortgage Loan or property acquired in respect thereof that has
                been purchased pursuant to Section 2.02, 2.03, 2.04 or 3.12,
                all amounts received thereon and not taken into account in
                determining the related Stated Principal Balance of such
                repurchased Mortgage Loan;

                        (viii) to reimburse the applicable Seller, the Master
                Servicer, the NIM Insurer or the Depositor for expenses
                incurred by any of them in connection with the Mortgage Loans
                or Certificates and reimbursable pursuant to Section 6.03
                hereof; provided that such amount shall only be withdrawn
                following the withdrawal from the Certificate Account for
                deposit into the Distribution Account pursuant to the
                following paragraph;

                        (ix) to pay any lender-paid primary mortgage insurance
                premiums;

                        (x) to withdraw any amount deposited in the
                Certificate Account and not required to be deposited therein;
                and

                        (xi) to clear and terminate the Certificate Account
                upon termination of this Agreement pursuant to Section 9.01
                hereof.

               In addition, no later than 1:00 p.m. Pacific time on the
Distribution Account Deposit Date, the Master Servicer shall withdraw from the
Certificate Account and remit to the Trustee the Interest Remittance Amount
and Principal Remittance Amount for each Loan Group, and the Trustee shall
deposit such amount in the Distribution Account.

               The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On
the Closing Date, CHL shall deposit into the Principal Reserve Fund $300.00.
Funds on deposit in the Principal Reserve Fund shall not be invested. The
Principal Reserve Fund shall be treated as an "outside reserve fund" under
applicable Treasury regulations and shall not be part of any REMIC created
under this Agreement.

               On the Business Day before the December 2004 Distribution Date,
the Trustee shall transfer $100.00 from the Principal Reserve Fund to the
Distribution Account and shall distribute such amount to the Class A-R
Certificates on such Distribution Date.

               On the Business Day before the Class PF Principal Distribution
Date, the Trustee shall transfer $100.00 from the Principal Reserve Fund to
the Distribution Account and shall distribute such amount to the Class PF
Certificates on the Class PF Principal Distribution Date. On the Business Day
before the Class PV Principal Distribution Date, the Trustee shall transfer
from the Principal Reserve Fund to the Distribution Account $100.00 and shall
distribute such amount to the Class PV Certificates on the Class PV Principal
Distribution Date. Following the distributions to be made in accordance with
the two preceding sentences, the Trustee shall then terminate the Principal
Reserve Fund.

               The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Certificate



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Account pursuant to subclauses (i), (ii), (iv), (v), (vi), (vii) and (viii)
above. Prior to making any withdrawal from the Certificate Account pursuant to
subclause (iv), the Master Servicer shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous
Advance determined by the Master Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loan(s), and their respective portions of
such Nonrecoverable Advance.

               (b) The Trustee shall withdraw funds from the Distribution
Account for distribution to the Certificateholders and the Class 1-AV-1
Insurer in the manner specified in this Agreement (and to withhold from the
amounts so withdrawn, the amount of any taxes that it is authorized to retain
pursuant to the penultimate paragraph of Section 8.11). In addition, the
Trustee may from time to time make withdrawals from the Distribution Account
for the following purposes:

                        (i) to pay the Trustee the Trustee Fee on each
                Distribution Date;

                        (ii) to pay to the Master Servicer, as additional
                servicing compensation, earnings on or investment income with
                respect to funds in or credited to the Distribution Account;

                        (iii) to withdraw pursuant to Section 3.05 any amount
                deposited in the Distribution Account and not required to be
                deposited therein;

                        (iv) to reimburse the Trustee for any unreimbursed
                Advances made by it pursuant to Section 4.01(d) hereof, such
                right of reimbursement pursuant to this subclause (iv) being
                limited to (x) amounts received on the related Mortgage
                Loan(s) in respect of which any such Advance was made and (y)
                amounts not otherwise reimbursed to the Trustee pursuant to
                Section 3.08(a)(ii) hereof;

                        (v) to reimburse the Trustee for any Nonrecoverable
                Advance previously made by the Trustee pursuant to Section
                4.01(d) hereof, such right of reimbursement pursuant to this
                subclause (v) being limited to amounts not otherwise
                reimbursed to the Trustee pursuant to Section 3.08(a)(iv)
                hereof; and

                        (vi) to clear and terminate the Distribution Account
                upon termination of the Agreement pursuant to Section 9.01
                hereof.

               (c) The Trustee shall withdraw funds from the Carryover Reserve
Fund for distribution to the Certificateholders in the manner specified in
this Agreement (and to withhold from the amounts so withdrawn, the amount of
any taxes that it is authorized to retain pursuant to the penultimate
paragraph of Section 8.11). In addition, the Trustee may from time to time
make withdrawals from the Carryover Reserve Fund for the following purposes:

                       (1) to withdraw any amount deposited in the Carryover
        Reserve Fund and not required to be deposited therein; and

                       (2) to clear and terminate the Carryover Reserve Fund
        upon termination of the Agreement pursuant to Section 9.01 hereof.



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               Section 3.09 [Reserved].

               Section 3.10 Maintenance of Hazard Insurance.

               The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds of such policy shall be sufficient to prevent the related
Mortgagor and/or mortgagee from becoming a co-insurer. Each such policy of
standard hazard insurance shall contain, or have an accompanying endorsement
that contains, a standard mortgagee clause. The Master Servicer shall also
cause flood insurance to be maintained on property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, to the extent described
below. Pursuant to Section 3.05 hereof, any amounts collected by the Master
Servicer under any such policies (other than the amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Certificate
Account. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating monthly distributions to
the Certificateholders or remittances to the Trustee for their benefit, be
added to the principal balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan so permit. Such costs shall be recoverable by the
Master Servicer out of late payments by the related Mortgagor or out of
Liquidation Proceeds or Subsequent Recoveries to the extent permitted by
Section 3.08 hereof. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special
flood hazard area and such area is participating in the national flood
insurance program, the Master Servicer shall cause flood insurance to be
maintained with respect to such Mortgage Loan. Such flood insurance shall be
in an amount equal to the lesser of (i) the original principal balance of the
related Mortgage Loan, (ii) the replacement value of the improvements that are
part of such Mortgaged Property, or (iii) the maximum amount of such insurance
available for the related Mortgaged Property under the Flood Disaster
Protection Act of 1973, as amended.

               Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
                            Agreements.

               (a) Except as otherwise provided in this Section 3.11(a), when
any property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of
such conveyance, enforce any due-on-sale clause contained in any Mortgage Note
or Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies
the terms and conditions contained in the Mortgage Note and Mortgage related
thereto and the consent of the mortgagee under such Mortgage Note or Mortgage
is not otherwise so required under such Mortgage Note or Mortgage as a
condition to such transfer. In



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the event that the Master Servicer is prohibited by law from enforcing any
such due-on-sale clause, or if coverage under any Required Insurance Policy
would be adversely affected, or if nonenforcement is otherwise permitted
hereunder, the Master Servicer is authorized, subject to Section 3.11(b), to
take or enter into an assumption and modification agreement from or with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required
Insurance Policies to enter into a substitution of liability agreement with
such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable under
the Mortgage Note. The Master Servicer shall notify the Trustee that any such
substitution, modification or assumption agreement has been completed by
forwarding to the Co-Trustee the executed original of such substitution 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.

               (b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.11(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a
Mortgagor, and such Person is to enter into an assumption agreement or
modification agreement or supplement to the Mortgage Note or Mortgage that
requires the signature of the Trustee, or if an instrument of release signed
by the Trustee is required releasing the Mortgagor from liability on the
Mortgage Loan, the Master Servicer shall prepare and deliver or cause to be
prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to
whom the Mortgaged Property is to be conveyed and such modification agreement
or supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person. In connection with
any such assumption, no material term of the Mortgage Note (including, but not
limited to, the Mortgage Rate, the amount of the Scheduled Payment, the
Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross Margin, the
Initial Periodic Rate Cap, the Subsequent Periodic Rate Cap, the Adjustment
Date and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance
with its underwriting standards as then in effect. The Master Servicer shall
notify the Trustee that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original of such substitution or
assumption agreement, which in the case of the original 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. Any fee collected by the Master Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional servicing compensation.



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               Section 3.12 Realization Upon Defaulted Mortgage Loans;
                            Determination of Excess Proceeds and Realized
                            Losses; Repurchase of Certain Mortgage Loans.

               (a) The Master Servicer may agree to a modification of any
Mortgage Loan (the "Modified Mortgage Loan") if (i) the modification is in
lieu of a refinancing and (ii) the Mortgage Rate on the Modified Mortgage Loan
is approximately a prevailing market rate for newly-originated mortgage loans
having similar terms and (iii) the Master Servicer purchases the Modified
Mortgage Loan from the Trust Fund as described below. Effective immediately
after the modification, and, in any event, on the same Business Day on which
the modification occurs, all interest of the Trustee in the Modified Mortgage
Loan shall automatically be deemed transferred and assigned to the Master
Servicer and all benefits and burdens of ownership thereof, including the
right to accrued interest thereon from the date of modification and the risk
of default thereon, shall pass to the Master Servicer. The Master Servicer
shall promptly deliver to the Trustee a certification of a Servicing Officer
to the effect that all requirements of this paragraph have been satisfied with
respect to the Modified Mortgage Loan. For federal income tax purposes, the
Trustee shall account for such purchase as a prepayment in full of the
Modified Mortgage Loan. The Master Servicer shall deposit the Purchase Price
for any Modified Mortgage Loan in the Certificate Account pursuant to Section
3.05 within one Business Day after the purchase of the Modified Mortgage Loan.
Upon receipt by the Trustee of written notification of any such deposit signed
by a Servicing Officer, the Trustee shall release to the Master Servicer the
related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary
to vest in the Master Servicer any Modified Mortgage Loan previously
transferred and assigned pursuant hereto. The Master Servicer covenants and
agrees to indemnify the Trust Fund against any liability for any "prohibited
transaction" taxes and any related interest, additions, and penalties imposed
on the Trust Fund established hereunder as a result of any modification of a
Mortgage Loan effected pursuant to this subsection (b), any holding of a
Modified Mortgage Loan by the Trust Fund or any purchase of a Modified
Mortgage Loan by the Master Servicer (but such obligation shall not prevent
the Master Servicer or any other appropriate Person from in good faith
contesting any such tax in appropriate proceedings and shall not prevent the
Master Servicer from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings). The Master Servicer shall have no
right of reimbursement for any amount paid pursuant to the foregoing
indemnification, except to the extent that the amount of any tax, interest,
and penalties, together with interest thereon, is refunded to the Trust Fund
or the Master Servicer. If the Master Servicer agrees to a modification of any
Mortgage Loan pursuant to this Section 3.12(a), and if such Mortgage Loan
carries a Prepayment Charge provision, the Master Servicer will deliver to the
Trustee the amount of the Prepayment Charge, if any, that would have been due
had such Mortgage Loan been prepaid at the time of such modification, for
deposit into the Certificate Account (not later than 1:00 p.m. Pacific time on
the Master Servicer Advance Date immediately succeeding the date of such
modification) for distribution in accordance with the terms of this Agreement.

               (b) The Master Servicer shall use reasonable efforts 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. In connection with such foreclosure or other conversion,




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the Master Servicer shall follow such practices and procedures as it shall
deem necessary or advisable and as shall be normal and usual in its general
mortgage servicing activities and the requirements of the insurer under any
Required Insurance Policy; provided that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of
the Mortgage Loan after reimbursement to itself of such expenses and (ii) that
such expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Certificate Account pursuant to Section 3.08 hereof). The Master Servicer
shall be responsible for all other costs and expenses incurred by it in any
such proceedings; provided that it shall be entitled to reimbursement thereof
from the proceeds of liquidation of the related Mortgaged Property and any
related Subsequent Recoveries, as contemplated in Section 3.08 hereof. If the
Master Servicer has knowledge that a Mortgaged Property that the Master
Servicer is contemplating acquiring in foreclosure or by deed-in-lieu of
foreclosure is located within a one-mile radius of any site with environmental
or hazardous waste risks known to the Master Servicer, the Master Servicer
will, prior to acquiring the Mortgaged Property, consider such risks and only
take action in accordance with its established environmental review
procedures.

               With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such
REO Property solely as the Trustee hereunder and not in its individual
capacity. The Master Servicer shall ensure that the title to such REO Property
references this Agreement and the Trustee's capacity thereunder. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall either itself
or through an agent selected by the Master Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent
the same, or any part thereof, as the Master Servicer deems to be in the best
interest of the Master Servicer and the Certificateholders for the period
prior to the sale of such REO Property. The Master Servicer shall prepare for
and deliver to the Trustee a statement with respect to each 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 Trustee to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Certificate
Account no later than the close of business on each Determination Date. The
Master Servicer shall perform 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 Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Master Servicer shall dispose of such
Mortgaged Property as soon as practicable in a manner that maximizes the
Liquidation Proceeds, but in no event later than three years after its
acquisition by the Trust Fund or, at the expense of the Trust Fund, the Master
Servicer shall 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. In the event the Trustee shall have been supplied with an Opinion of




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Counsel (such opinion not to be an expense of the Trustee) to the effect that
the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund as defined in section 860F of the Code or
cause any REMIC formed hereunder to fail to qualify as a REMIC at any time
that any Certificates are outstanding, and the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion
of Counsel) after the expiration of such three-year period. Notwithstanding
any other provision of this Agreement, no Mortgaged Property acquired by the
Trust Fund shall be rented (or allowed to continue to be rented) or otherwise
used for the production of income by or on behalf of the Trust Fund in such a
manner or pursuant to any terms that would (i) cause such Mortgaged Property
to fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition of any
federal, state or local income taxes on the income earned from such Mortgaged
Property under section 860G(c) of the Code or otherwise, unless the Master
Servicer has agreed to indemnify and hold harmless the Trust Fund with respect
to the imposition of any such taxes.

               The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of
bringing such a proceeding. The income earned from the management of any
Mortgaged Properties acquired through foreclosure or other judicial
proceeding, net of reimbursement to the Master Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of unreimbursed Servicing Fees, Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied to the payment of principal of, and
interest on, the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited
into the Certificate Account. To the extent the income received during a
Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.

               The Liquidation Proceeds from any liquidation of a Mortgage
Loan and any Subsequent Recoveries, net of any payment to the Master Servicer
as provided above, shall be deposited in the Certificate Account as provided
in Section 3.05 for distribution on the related Distribution Date, except that
any Excess Proceeds shall be retained by the Master Servicer as additional
servicing compensation.

               The proceeds of any Liquidated Mortgage Loan, as well as any
recovery resulting from a partial collection of Liquidation Proceeds or any
income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Master Servicer for any related unreimbursed
Servicing Advances and Servicing Fees, pursuant to Section 3.08(a)(vi) or this
Section 3.12; second, to reimburse the Master Servicer for any unreimbursed
Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to
accrued and unpaid interest (to the extent no Advance has been made for such
amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate
to the Due Date occurring in the month in which such amounts are required to
be distributed; and fourth, as a recovery of principal of the Mortgage Loan.



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               (c) [Reserved].

               (d) The Master Servicer, in its sole discretion, shall have the
right to elect (by written notice sent to the Trustee) to purchase for its own
account from the Trust Fund any Mortgage Loan that is 150 days or more
delinquent at a price equal to the Purchase Price; provided, however, that the
Master Servicer may only exercise this right on or before the last day of the
calendar month in which such Mortgage Loan became 150 days delinquent (such
month, the "Eligible Repurchase Month"); provided further, that any such
Mortgage Loan which becomes current but thereafter becomes delinquent may be
purchased by the Master Servicer pursuant to this Section in any ensuing
Eligible Repurchase Month. The Purchase Price for any Mortgage Loan purchased
hereunder shall be deposited in the Certificate Account. Any purchase of a
Mortgage Loan pursuant to this Section 3.12(d) shall be accomplished by
remittance to the Master Servicer for deposit in the Certificate Account of
the Purchase Price. The Trustee, upon receipt of certification from the Master
Servicer of such deposit and a Request for File Release from the Master
Servicer, shall release or cause to be released to the purchaser of such
Mortgage Loan the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such
Mortgage Loan, in each case without recourse, as shall be necessary to vest in
the purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto
and the purchaser of such Mortgage Loan shall succeed to all the Trustee's
right, title and interest in and to such Mortgage Loan and all security and
documents related thereto. Such assignment shall be an assignment outright and
not for security. The purchaser of such Mortgage Loan shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation
to the Trustee or the Certificateholders with respect thereto.

               Section 3.13 Co-Trustee to Cooperate; Release of Mortgage
                            Files.

               Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Master Servicer will promptly
notify the Co-Trustee by delivering a Request for File Release. Upon receipt
of such request, the Co-Trustee shall promptly release the related Mortgage
File to the Master Servicer, and the Co-Trustee shall at the Master Servicer's
direction execute and deliver to the Master Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage in each case provided by
the Master Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. The Master Servicer is authorized to cause the removal
from the registration on the MERS(R) System of such Mortgage and to execute
and deliver, on behalf of the Trust Fund and the Certificateholders or any of
them, any and all instruments of satisfaction or cancellation or of partial or
full release. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account, the Distribution Account, the Carryover Reserve Fund or the related
subservicing account. From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose,
collection under any policy of flood insurance any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Co-Trustee shall, upon delivery to the
Co-Trustee of a Request for Document Release or a Request for File



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Release, as applicable, release the documents specified in such request or the
Mortgage File, as the case may be, to the Master Servicer. Subject to the
further limitations set forth below, the Master Servicer shall cause the
Mortgage File or documents so released to be returned to the Co-Trustee when
the need therefor by the Master Servicer no longer exists, unless the Mortgage
Loan is liquidated and the proceeds thereof are deposited in the Certificate
Account, in which case the Master Servicer shall deliver to the Co-Trustee a
Request for File Release for any remaining documents in the Mortgage File not
in the possession of the Master Servicer.

               If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the
documents therein that shall have been released by the Co-Trustee to be
returned to the Co-Trustee within 21 calendar days after possession thereof
shall have been released by the Co-Trustee unless (i) the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Certificate Account, and the Master Servicer shall
have delivered to the Co-Trustee a Request for File Release or (ii) the
Mortgage File or document shall have been delivered to an attorney or to a
public trustee or other public official as required by law for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property and the Master Servicer shall have delivered to the
Trustee an Officer's Certificate of a Servicing Officer certifying as to the
name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.

               Section 3.14 Documents, Records and Funds in Possession of
                            Master Servicer to be Held for the Trustee.

               Notwithstanding any other provisions of this Agreement, the
Master Servicer shall transmit to the Co-Trustee as required by this Agreement
all documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise
are collected by the Master Servicer as Liquidation Proceeds, Insurance
Proceeds or Subsequent Recoveries in respect of any Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Subsequent
Recoveries including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trust Fund and shall be and remain the sole and exclusive property of the
Trust Fund, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, the
Distribution Account, the Carryover Reserve Fund or in any Escrow Account (as
defined in Section 3.06), or any funds that otherwise are or may become due or
payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of



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attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Master
Servicer shall be entitled to set off against and deduct from any such funds
any amounts that are properly due and payable to the Master Servicer under
this Agreement.

               Section 3.15 Servicing Compensation.

               As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain or withdraw from the Certificate Account
out of each payment of interest on a Mortgage Loan included in the Trust Fund
an amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.

               Additional servicing compensation in the form of any Excess
Proceeds, assumption fees, late payment charges, Prepayment Interest Excess,
and all income and gain net of any losses realized from Permitted Investments
shall be retained by the Master Servicer to the extent not required to be
deposited in the Certificate Account pursuant to Section 3.05 or 3.12(b)
hereof. The Master Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
any premiums for hazard insurance, as required by Section 3.10 hereof and
maintenance of the other forms of insurance coverage required by Section 3.10
hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.08 and 3.12 hereof.

               Section 3.16 Access to Certain Documentation.

               The Master Servicer shall provide to the OTS and the FDIC and
to comparable regulatory authorities supervising Holders of the Certificates
and Certificate Owners and the examiners and supervisory agents of the OTS,
the FDIC and such other authorities, access to the documentation regarding the
Mortgage Loans required by applicable regulations of the OTS and the FDIC.
Such access shall be afforded without charge, but only upon reasonable and
prior written request and during normal business hours at the offices of the
Master Servicer designated by it. Nothing in this Section shall limit the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Master Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.

               Section 3.17 Annual Statement as to Compliance.

               The Master Servicer shall deliver to the Depositor and the
Trustee on or before the 80th day after the end of the Master Servicer's
fiscal year, commencing with its 2004 fiscal year, an Officer's Certificate
stating, as to the signer thereof, that (i) a review of the activities of the
Master Servicer during the preceding calendar year and of the performance of
the Master Servicer under this Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Master Servicer has fulfilled all 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



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nature and status thereof and (iii) to the best of such officer's knowledge,
each Subservicer has fulfilled all its obligations under its Subservicing
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. The Trustee shall forward a copy of
each such statement to each Rating Agency. Copies of such statement shall be
provided by the Trustee to any Certificateholder or Certificate Owner upon
request at the Master Servicer's expense, provided such statement is delivered
by the Master Servicer to the Trustee.

               Section 3.18 Annual Independent Public Accountants' Servicing
                            Statement; Financial Statements.

               On or before the later of (i) the 80th day after the end of the
Master Servicer's fiscal year, commencing with its 2004 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2004, the Master Servicer at
its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, CHL or
any affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a report to the Trustee, the Depositor and CHL
in compliance with the Uniform Single Attestation Program for Mortgage
Bankers. Copies of such report shall be provided by the Trustee to any
Certificateholder or Certificate Owner upon request at the Master Servicer's
expense, provided such report is delivered by the Master Servicer to the
Trustee. Upon written request, the Master Servicer shall provide to the
Certificateholders or Certificate Owners its publicly available annual
financial statements (or the Master Servicer's parent company's publicly
available annual financial statements, as applicable), if any, promptly after
they become available.

               Section 3.19 The Corridor Contracts.

               CHL shall assign all of its right, title and interest in and to
the interest rate corridor transactions evidenced by the Corridor Contracts
to, and shall cause all of its obligations in respect of such transactions to
be assumed by, the Trustee on behalf of the Trust Fund, on the terms and
conditions set forth in the Corridor Contract Assignment Agreement. The
Corridor Contracts will be assets of the Trust Fund but will not be an asset
of any REMIC. The Master Servicer, on behalf of the Trustee, shall deposit any
amounts received from time to time with respect to any Corridor Contract into
the Carryover Reserve Fund.

               The Master Servicer, on behalf of the Trustee, shall prepare
and deliver any notices required to be delivered under each Corridor Contract.

               The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate a Corridor Contract, in each case
upon the occurrence of certain events of default or termination events to the
extent specified thereunder. Upon any such termination, the Corridor Contract
Counterparty will be obligated to pay the Trustee or the Master Servicer for
the benefit of the Trust Fund an amount in respect of such termination. Any
amounts received by the Trustee or the Master Servicer for the benefit of the
Trust Fund, as the case may be, in respect of such termination shall be
deposited and held in the Carryover Reserve Fund to pay Net Rate Carryover for
the applicable Classes of Certificates as provided in Section 4.04(e) on the
Distribution Dates following such termination to and including the applicable
Corridor Contract



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Termination Date, but shall not be available for distribution to the
applicable Class of Class C Certificates pursuant to Section 4.08(c) or to CHL
pursuant to Section 4.08(c) until such applicable Corridor Contract
Termination Date. On the Corridor Contract Termination Date for the Class AF-1
Corridor Contract, the Class 1-AV-1 Corridor Contract, the Class 2-AV Corridor
Contract and the Adjustable Rate Subordinate Corridor Contract, after all
other distributions on such date, if any such amounts in respect of early
termination of the Class AF-1 Corridor Contract, the Class 1-AV-1 Corridor
Contract, the Class 2-AV Corridor Contract or the Adjustable Rate Subordinate
Corridor Contract remain in the Carryover Reserve Fund, such amounts shall be
distributed by the Trustee to (i) in the case of any such amounts relating to
the Class AF-1 Corridor Contract, the Class CF Certificates, and (ii) in the
case of any such amounts relating to the Class 1-AV-1 Corridor Contract, the
Class 2-AV Corridor Contract and the Adjustable Rate Subordinate Corridor
Contract, the CV Certificates.

               Section 3.20 Prepayment Charges.

               (a) Notwithstanding anything in this Agreement to the contrary,
in the event of a Principal Prepayment in full or in part of a Mortgage Loan,
the Master Servicer may not waive any Prepayment Charge or portion thereof
required by the terms of the related Mortgage Note unless (i) such Mortgage
Loan is in default or the Master Servicer believes that such a default is
imminent, and the Master Servicer determines that such waiver would maximize
recovery of Liquidation Proceeds for such Mortgage Loan, taking into account
the value of such Prepayment Charge, or (ii) (A) the enforceability thereof is
limited (1) by bankruptcy, insolvency, moratorium, receivership, or other
similar law relating to creditors' rights generally or (2) due to acceleration
in connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law. In the
event of a Principal Prepayment in full or in part with respect to any
Mortgage Loan, the Master Servicer shall deliver to the Trustee an Officer's
Certificate substantially in the form of Exhibit T no later than the third
Business Day following the immediately succeeding Determination Date with a
copy to the Class P Certificateholders. If the Master Servicer has waived or
does not collect all or a portion of a Prepayment Charge relating to a
Principal Prepayment in full or in part due to any action or omission of the
Master Servicer, other than as provided above, the Master Servicer shall
deliver to the Trustee, together with the Principal Prepayment in full or in
part, the amount of such Prepayment Charge (or such portion thereof as had
been waived) for deposit into the Certificate Account (not later than 1:00
p.m. Pacific time on the immediately succeeding Master Servicer Advance Date,
in the case of such Prepayment Charge) for distribution in accordance with the
terms of this Agreement.

               (b) Upon discovery by the Master Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing subsection (a), the party
discovering the breach shall give prompt written notice to the other parties.

               (c) CHL represents and warrants to the Depositor and the
Trustee, as of the Closing Date, that the information in the Prepayment Charge
Schedule (including the attached prepayment charge summary) is complete and
accurate in all material respects at the dates as of which the information is
furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms under applicable state law, except as the
enforceability thereof is limited due to acceleration in connection with a
foreclosure or other involuntary payment.



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<PAGE>

               (d) Upon discovery by the Master Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing clause (c) that materially
and adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties. Within 60 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of breach, the
Master Servicer shall cure the breach in all material respects or shall pay
into the Certificate Account the amount of the Prepayment Charge that would
otherwise be due from the Mortgagor, less any amount representing such
Prepayment Charge previously collected and paid by the Master Servicer into
the Certificate Account.

                                 ARTICLE IV.
               DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

               Section 4.01 Advances; Remittance Reports.

               (a) Within two Business Days after each Determination Date, the
Master Servicer shall deliver to the Trustee by facsimile or electronic mail
(or by such other means as the Master Servicer and the Trustee, as the case
may be, may agree from time to time) a Remittance Report with respect to the
related Distribution Date. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.

               (b) Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the
Certificate Account no later than 1:00 p.m. Pacific time on the Master
Servicer Advance Date in immediately available funds. The Trustee will provide
notice to the Master Servicer by facsimile by the close of business on any
Master Servicer Advance Date in the event that the amount remitted by the
Master Servicer to the Trustee on the Distribution Account Deposit Date is
less than the Advances required to be made by the Master Servicer for such
Distribution Date. The Master Servicer shall be obligated to make any such
Advance only to the extent that such advance would not be a Nonrecoverable
Advance. If the Master Servicer shall have determined that it has made a
Nonrecoverable Advance or that a proposed Advance or a lesser portion of such
Advance would constitute a Nonrecoverable Advance, the Master Servicer shall
deliver (i) to the Trustee for the benefit of the Certificateholders funds
constituting the remaining portion of such Advance, if applicable, and (ii) to
the Depositor, each Rating Agency and the Trustee an Officer's Certificate
setting forth the basis for such determination.

               (c) In lieu of making all or a portion of such Advance from its
own funds, the Master Servicer may (i) cause to be made an appropriate entry
in its records relating to the Certificate Account that any Amount Held for
Future Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required
to be distributed pursuant to this Agreement. The Master Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of its
own funds made



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pursuant to this Section as provided in Section 3.08. The obligation to make
Advances with respect to any Mortgage Loan shall continue until such Mortgage
Loan is paid in full or the related Mortgaged Property or related REO Property
has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trustee pursuant to any applicable provision
of this Agreement, except as otherwise provided in this Section 4.01.

               (d) If the Master Servicer determines that it will be unable to
comply with its obligation to make the Advances as and when described in
paragraphs (b) and (c) immediately above, it shall use its best efforts to
give written notice thereof to the Trustee (each such notice a "Trustee
Advance Notice"; and such notice may be given by facsimile), not later than
3:00 p.m., New York time, on the Business Day immediately preceding the
related Master Servicer Advance Date, specifying the amount that it will be
unable to deposit (each such amount an "Advance Deficiency") and certifying
that such Advance Deficiency constitutes an Advance hereunder and is not a
Nonrecoverable Advance. If the Trustee receives a Trustee Advance Notice on or
before 3:30 p.m., (New York time) on a Master Servicer Advance Date, the
Trustee shall, not later than 3:00 p.m., (New York time), on the related
Distribution Date, deposit in the Distribution Account an amount equal to the
Advance Deficiency identified in such Trustee Advance Notice unless it is
prohibited from so doing by applicable law. Notwithstanding the foregoing, the
Trustee shall not be required to make such deposit if the Trustee shall have
received written notification from the Master Servicer that the Master
Servicer has deposited or caused to be deposited in the Certificate Account an
amount equal to such Advance Deficiency. All Advances made by the Trustee
pursuant to this Section 4.01(d) shall accrue interest on behalf of the
Trustee at the Trustee Advance Rate from and including the date such Advances
are made to but excluding the date of repayment, with such interest being an
obligation of the Master Servicer and not the Trust Fund. The Master Servicer
shall reimburse the Trustee for the amount of any Advance made by the Trustee
pursuant to this Section 4.01(d) together with accrued interest, not later
than 6:00 p.m. (New York time) on the Business Day following the related
Distribution Date. In the event that the Master Servicer does not reimburse
the Trustee in accordance with the requirements of the preceding sentence, the
Trustee shall immediately (i) terminate all of the rights and obligations of
the Master Servicer under this Agreement in accordance with Section 7.01 and
(ii) subject to the limitations set forth in Section 3.04, assume all of the
rights and obligations of the Master Servicer hereunder.

               (e) The Master Servicer shall, not later than the close of
business on the second Business Day immediately preceding each Distribution
Date, deliver to the Trustee a report (in form and substance reasonably
satisfactory to the Trustee) that indicates (i) the Mortgage Loans with
respect to which the Master Servicer has determined that the related Scheduled
Payments should be advanced and (ii) the amount of the related Scheduled
Payments. The Master Servicer shall deliver to the Trustee on the related
Master Servicer Advance Date an Officer's Certificate of a Servicing Officer
indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.

               Section 4.02 Reduction of Servicing Compensation in Connection
                            with Prepayment Interest Shortfalls.

               In the event that any Mortgage Loan is the subject of a
Prepayment Interest Shortfall, the Master Servicer shall remit any related
Compensating Interest as part of the related



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Interest Remittance Amount as provided in this Agreement. The Master Servicer
shall not be entitled to any recovery or reimbursement for Compensating
Interest from the Depositor, the Trustee, either Seller, the Trust Fund or the
Certificateholders.

               Section 4.03 [Reserved].

               Section 4.04 Distributions.

               (a) Distributions of Interest Funds for Loan Group 1. On each
Distribution Date, the Interest Funds for such Distribution Date for Loan
Group 1 shall be allocated from the Distribution Account in the following
order of priority:

                        (i) from the Interest Funds for Loan Group 1,
                concurrently to each Class of Class AF Certificates, the
                Current Interest and Interest Carry Forward Amount for each
                such Class and such Distribution Date, pro rata, based on
                their respective entitlements,

                        (ii) from the remaining Interest Funds for Loan Group
                1, sequentially:

                                (a) to the Class MF-1 Certificates, the
                        Current Interest for such Class,

                                (b) to the Class MF-2 Certificates, the
                        Current Interest for such Class,

                                (c) to the Class MF-3 Certificates, the
                        Current Interest for such Class,

                                (d) to the Class MF-4 Certificates, the
                        Current Interest for such Class,

                                (e) to the Class MF-5 Certificates, the
                        Current Interest for such Class,

                                (f) to the Class MF-6 Certificates, the
                        Current Interest for such Class,

                                (g) to the Class MF-7 Certificates, the
                        Current Interest for such Class,

                                (h) to the Class BF Certificates, the Current
                        Interest for such Class, and

                                (i) any remainder as part of the Fixed Rate
                        Loan Group Excess Cashflow.

               (b) Distributions of Interest Funds for Loan Group 2 and Loan
Group 3. On each Distribution Date, the Interest Funds for such Distribution
Date with respect to Loan



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Group 2 and Loan Group 3 shall be allocated by the Trustee from the
Distribution Account in the following order of priority:

                        (i) concurrently:

                                (a) from Interest Funds for Loan Group 2,
                        sequentially, (1) to the Class 1-AV-1 Insurer, the
                        Class 1-AV-1 Premium for such Distribution Date, (2)
                        to the Class 1-AV-1 Certificates, the Current Interest
                        for such Class and Distribution Date, (3) to the Class
                        1-AV-1 Insurer, any Class 1-AV-1 Reimbursement Amount
                        and (4) to the Class 1-AV-1 Certificates, the Interest
                        Carry Forward Amount for such Class and Distribution
                        Date, in that order,

                                (b) from Interest Funds for Loan Group 3,
                        concurrently to each Class of Class 2-AV Certificates,
                        the Current Interest and Interest Carry Forward Amount
                        for each such Class and such Distribution Date, pro
                        rata, based on their respective entitlements,

                        (ii) from the remaining Interest Funds for Loan Group
                2 and Loan Group 3, in the following order of priority:

                                (a) to the Class 1-AV-1 Insurer, any remaining
                        Class 1-AV-1 Premium for such Distribution Date not
                        paid pursuant to clause 4.04(b)(i)(a)(1) above,

                                (b) to each Class of Class AV Certificates,
                        any remaining Current Interest not paid pursuant to
                        clauses 4.04(b)(i)(a)(2) and 4.04(b)(i)(b) above, pro
                        rata, based on the Certificate Principal Balances
                        thereof, to the extent needed to pay any Current
                        Interest for each such Class; provided that Interest
                        Funds remaining after such allocation to pay any
                        Current Interest based on the Certificate Principal
                        Balances of the Certificates will be distributed to
                        each Class of Class AV Certificates with respect to
                        which there remains any unpaid Current Interest (after
                        the distribution based on Certificate Principal
                        Balances), pro rata, based on the amount of such
                        remaining unpaid Current Interest;

                                (c) to the Class 1-AV-1 Insurer, any remaining
                        Class 1-AV-1 Reimbursement Amount not paid pursuant to
                        clause 4.04(b)(i)(a)(3) above,

                                (d) to each Class of Class AV Certificates,
                        any remaining Interest Carry Forward Amount not paid
                        pursuant to clauses 4.04(b)(i)(a)(4) and 4.04(b)(i)(b)
                        above, pro rata, based on the Certificate Principal
                        Balances thereof, to the extent needed to pay any
                        Interest Carry Forward Amount for each such Class;
                        provided that Interest Funds remaining after such
                        allocation to pay any Interest Carry Forward Amount
                        based on the Certificate Principal Balances of the
                        Certificates will be distributed to each Class of
                        Class AV Certificates with respect to which



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                        there remains any unpaid Interest Carry Forward Amount
                        (after the distribution based on Certificate Principal
                        Balances), pro rata, based on the amount of such
                        remaining unpaid Interest Carry Forward Amount;

                        (iii) from the remaining Interest Funds for Loan Group
                2 and Loan Group 3, sequentially:

                                (a) to the Class MV-1 Certificates, the
                        Current Interest for such Class,

                                (b) to the Class MV-2 Certificates, the
                        Current Interest for such Class,

                                (c) to the Class MV-3 Certificates, the
                        Current Interest for such Class,

                                (d) to the Class MV-4 Certificates, the
                        Current Interest for such Class,

                                (e) to the Class MV-5 Certificates, the
                        Current Interest for such Class,

                                (f) to the Class MV-6 Certificates, the
                        Current Interest for such Class,

                                (g) to the Class MV-7 Certificates, the
                        Current Interest for such Class,

                                (h) to the Class MV-8 Certificates, the
                        Current Interest for such Class,

                                (i) to the Class BV Certificates, the Current
                        Interest for such Class, and

                                (j) any remainder as part of the Adjustable
                        Rate Loan Group Excess Cashflow.

               (c) On each Distribution Date, the Principal Distribution
Amount for such Distribution Date with respect to Loan Group 1 shall be
allocated by the Trustee from the Distribution Account in the following order
of priority:

                (1) with respect to any Distribution Date prior to the Fixed
        Rate Stepdown Date or on which a Fixed Rate Trigger Event is in
        effect, from the Principal Distribution Amount for Loan Group 1,
        sequentially:

                        (A) to the Class AF Certificates, in the order and
                priorities set forth in clause (3) below, until the
                Certificate Principal Balances thereof are reduced to zero,



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                        (B) to the Class MF-1 Certificates, until the
                Certificate Principal Balance thereof is reduced to zero,

                        (C) to the Class MF-2 Certificates, until the
                Certificate Principal Balance thereof is reduced to zero,

                        (D) to the Class MF-3 Certificates, until the
                Certificate Principal Balance thereof is reduced to zero,

                        (E) to the Class MF-4 Certificates, until the
                Certificate Principal Balance thereof is reduced to zero,

                        (F) to the Class MF-5 Certificates, until the
                Certificate Principal Balance thereof is reduced to zero,

                        (G) to the Class MF-6 Certificates, until the
                Certificate Principal Balance thereof is reduced to zero,

                        (H) to the Class MF-7 Certificates, until the
                Certificate Principal Balance thereof is reduced to zero,

                        (I) to the Class BF Certificates, until the
                Certificate Principal Balance thereof is reduced to zero, and

                        (J) any remainder as part of the Fixed Rate Loan Group
                Excess Cashflow.

                (2) with respect to any Distribution Date on or after the
        Fixed Rate Stepdown Date and so long as a Fixed Rate Trigger Event is
        not in effect from the Principal Distribution Amount for Loan Group 1,
        sequentially:

                        (A) in an amount up to the Class AF Principal
                Distribution Amount, to the Class AF Certificates in the order
                and priorities set forth in clause (3) below, until the
                Certificate Principal Balances thereof are reduced to zero,

                        (B) to the Class MF-1 Certificates, the Class MF-1
                Principal Distribution Amount until the Certificate Principal
                Balance thereof is reduced to zero,

                        (C) to the Class MF-2 Certificates, the Class MF-2
                Principal Distribution Amount until the Certificate Principal
                Balance thereof is reduced to zero,

                        (D) to the Class MF-3 Certificates, the Class MF-3
                Principal Distribution Amount until the Certificate Principal
                Balance thereof is reduced to zero,



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                        (E) to the Class MF-4 Certificates, the Class MF-4
                Principal Distribution Amount until the Certificate Principal
                Balance thereof is reduced to zero,

                        (F) to the Class MF-5 Certificates, the Class MF-5
                Principal Distribution Amount until the Certificate Principal
                Balance thereof is reduced to zero,

                        (G) to the Class MF-6 Certificates, the Class MF-6
                Principal Distribution Amount until the Certificate Principal
                Balance thereof is reduced to zero,

                        (H) to the Class MF-7 Certificates, the Class MF-7
                Principal Distribution Amount until the Certificate Principal
                Balance thereof is reduced to zero,

                        (I) to the Class BF Certificates, the Class BF
                Principal Distribution Amount until the Certificate Principal
                Balance thereof is reduced to zero, and

                        (J) any remainder as part of the Fixed Rate Loan Group
                Excess Cashflow.

                (3) On each Distribution Date on which any principal amounts
        are to be distributed to the Class AF Certificates, such amounts shall
        be distributed to the Class AF Certificates in the following order of
        priority:

                        (A) the NAS Principal Distribution Amount to the Class
                AF-6 Certificates, until the Certificate Principal Balance
                thereof is reduced to zero,

                        (B) sequentially, to the Class AF-1, Class AF-2, Class
                AF-3, Class AF-4 and Class AF-5 Certificates, in that order,
                in each case until the Certificate Principal Balance thereof
                is reduced to zero, and

                        (C) to the Class AF-6 Certificates without regard to
                the NAS Principal Distribution Amount, until the Certificate
                Principal Balance thereof is reduced to zero.

Notwithstanding the foregoing order of priority, on any Distribution Date on
which the aggregate Certificate Principal Balance of the Class AF Certificates
is greater than the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 1, any principal amounts to be distributed to the Class AF
Certificates shall be distributed pro rata, based on the Certificate Principal
Balances thereof, in each case until the Certificate Principal Balance thereof
is reduced to zero, and not as described above.




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<PAGE>

               (d) On each Distribution Date, the Principal Distribution
Amount for such Distribution Date with respect to Loan Group 2 and Loan Group
3 shall be allocated by the Trustee from the Distribution Account in the
following order of priority:

                (1) with respect to any Distribution Date prior to the
        Adjustable Rate Stepdown Date or on which an Adjustable Rate Trigger
        Event is in effect, sequentially:

                (A) concurrently:

                (i) from the Principal Distribution Amount for Loan Group 2,
        sequentially:

                        (a) to the Class 1-AV-1 Insurer, any remaining Class
                1-AV-1 Premium that has not been paid from Interest Funds for
                Loan Group 2 and Loan Group 3 for such Distribution Date,

                        (b) to the Class 1-AV-1 Certificates, until the
                Certificate Principal Balance thereof is reduced to zero,

                        (c) to the Class 1-AV-1 Insurer, any remaining Class
                1-AV-1 Reimbursement Amount that has not been paid from
                Interest Funds for Loan Group 2 and Loan Group 3 for such
                Distribution Date; and

                        (d) to each Class of Class 2-AV Certificates (after
                the distribution of the Principal Distribution Amount from
                Loan Group 3 as provided in clause 4.04(d)(1)(A)(ii)(a)
                below), in the order and priorities set forth in clause (3)
                below, until the Certificate Principal Balances thereof are
                reduced to zero,

                (ii) from the Principal Distribution Amount for Loan Group 3,
        sequentially:

                        (a) to each Class of Class 2-AV Certificates, in the
                order and priorities set forth in clause (3) below, until the
                Certificate Principal Balances thereof are reduced to zero,
                and

                        (b) from any remaining Principal Distribution Amount
                for Loan Group 3, first to the Class 1-AV-1 Insurer any
                remaining Class 1-AV-1 Premium for such Distribution Date to
                the extent not previously paid pursuant to clause (1)(A)(i)(a)
                above, second, to the Class 1-AV-1 Certificates (after the
                distribution of the Principal Distribution Amount from Loan
                Group 2 as provided in clause 4.04(d)(1)(A)(i)(b) above),
                until the Certificate Principal Balance thereof is reduced to
                zero and third, to the Class 1-AV-1 Insurer, any remaining
                Class 1-AV-1 Reimbursement Amount to the extent not previously
                paid pursuant to clause 4.04(d)(1)(A)(i)(c) above,



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                (B) from the remaining Principal Distribution Amounts for Loan
        Group 2 and Loan Group 3, sequentially:

                (i) to the Class MV-1 Certificates, until the Certificate
        Principal Balance thereof is reduced to zero,

                (ii) to the Class MV-2 Certificates, until the Certificate
        Principal Balance thereof is reduced to zero,

                (iii) to the Class MV-3 Certificates, until the Certificate
        Principal Balance thereof is reduced to zero,

                (iv) to the Class MV-4 Certificates, until the Certificate
        Principal Balance thereof is reduced to zero,

                (v) to the Class MV-5 Certificates, until the Certificate
        Principal Balance thereof is reduced to zero,

                (vi) to the Class MV-6 Certificates, until the Certificate
        Principal Balance thereof is reduced to zero,

                (vii) to the Class MV-7 Certificates, until the Certificate
        Principal Balance thereof is reduced to zero,

                (viii) to the Class MV-8 Certificates, until the Certificate
        Principal Balance thereof is reduced to zero,

                (ix) to the Class BV Certificates, until the Certificate
        Principal Balance thereof is reduced to zero, and

                (x) any remainder as part of the Adjustable Rate Loan Group
        Excess Cashflow.

                (2) with respect to any Distribution Date on or after the
        Adjustable Rate Stepdown Date and so long as an Adjustable Rate
        Trigger Event is not in effect, from the Principal Distribution
        Amounts for Loan Group 2 and Loan Group 3, sequentially:

                (A) in an amount up to the Class AV Principal Distribution
        Target Amount, pro rata based on the related Class AV Principal
        Distribution Allocation Amount for the Class 1-AV-1 Certificates and
        the Class 2-AV Certificates, respectively, concurrently, to (I) the
        Class 1-AV-1 Certificates, in an amount up to the Class 1-AV-1
        Principal Distribution Amount, until the Certificate Principal Balance
        thereof is reduced to zero and (II) each Class of Class 2-AV
        Certificates, in an amount up to the Class 2-AV Principal Distribution
        Amount in the order and priorities set forth in clause (3) below,
        until the Certificate Principal Balances thereof are reduced to zero;
        provided, however, that if either the Certificate Principal Balance of
        the Class 1-AV-1 Certificates or the aggregate Certificate



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        Principal Balance of the Class 2-AV Certificates is reduced to zero
        then any remaining unpaid Class AV Principal Distribution Target
        Amount will be distributed pro rata to each Class of remaining Class
        AV Certificates based on their remaining respective Certificate
        Principal Balances after distributions from (I) and (II) above,

                (B) to the Class 1-AV-1 Insurer, any remaining Class 1-AV-1
        Premium and any remaining Class 1-AV-1 Reimbursement Amount that has
        not been paid from Interest Funds for Loan Group 2 and Loan Group 3
        for such Distribution Date,

                (C) to the Class MV-1 Certificates, the Class MV-1 Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero,

                (D) to the Class MV-2 Certificates, the Class MV-2 Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero,

                (E) to the Class MV-3 Certificates, the Class MV-3 Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero,

                (F) to the Class MV-4 Certificates, the Class MV-4 Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero,

                (G) to the Class MV-5 Certificates, the Class MV-5 Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero,

                (H) to the Class MV-6 Certificates, the Class MV-6 Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero,

                (I) to the Class MV-7 Certificates, the Class MV-7 Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero,

                (J) to the Class MV-8 Certificates, the Class MV-8 Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero,

                (K) to the Class BV Certificates, the Class BV Principal
        Distribution Amount until the Certificate Principal Balance thereof is
        reduced to zero, and

                (L) any remainder as part of the Adjustable Rate Loan Group
        Excess Cashflow.



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<PAGE>

                (3) On each Distribution Date on which any principal amounts
        are to be distributed to the Class 2-AV Certificates, such amounts
        shall be distributed sequentially, to the Class 2-AV-1, Class 2-AV-2
        and Class 2-AV-3 Certificates, in that order, in each case until the
        Certificate Principal Balance thereof is reduced to zero.

Notwithstanding the foregoing order of priority, on any Distribution Date on
which (x) the aggregate Certificate Principal Balance of the Class AV
Certificates is greater than the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 and Loan Group 3 and (y) the aggregate
Certificate Principal Balance of the Class 2-AV Certificates is greater than
the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 3,
any principal amounts to be distributed to the Class 2-AV Certificates shall
be distributed pro rata, based on the Certificate Principal Balances thereof,
in each case until the Certificate Principal Balance thereof is reduced to
zero, and not as described above.

               (e) With respect to any Distribution Date, any Fixed Rate Loan
Group Excess Cashflow and, in the case of clauses 1, 3, 5, 7, 9, 11, 13, 15
and 17 below, any amounts in the Credit Comeback Excess Account available for
such Distribution Date, shall be paid to the Classes of Certificates in the
following order of priority, in each case first to the extent of the remaining
Credit Comeback Excess Cashflow, if applicable, and second to the extent of
the remaining Fixed Rate Loan Group Excess Cashflow:

                1.      to the Holders of the Class or Classes of Class AF
                        Certificates and Fixed Rate Subordinate Certificates
                        then entitled to receive distributions in respect of
                        principal, in an amount equal to the Extra Principal
                        Distribution Amount for Loan Group 1, payable to such
                        Holders as part of the Principal Distribution Amount
                        pursuant to Section 4.04(c) above; provided, however,
                        that Credit Comeback Excess Cashflow (if any) shall
                        only be distributed pursuant to this clause, on or
                        after the Distribution Date in January 2005 and if the
                        Fixed Rate Overcollateralization Target Amount has at
                        any previous time been met;

                2.      to the Holders of the Class MF-1 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                3.      to the Holders of the Class MF-1 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                4.      to the Holders of the Class MF-2 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                5.      to the Holders of the Class MF-2 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                6.      to the Holders of the Class MF-3 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                7.      to the Holders of the Class MF-3 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;



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<PAGE>

                8.      to the Holders of the Class MF-4 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                9.      to the Holders of the Class MF-4 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                10.     to the Holders of the Class MF-5 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                11.     to the Holders of the Class MF-5 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                12.     to the Holders of the Class MF-6 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                13.     to the Holders of the Class MF-6 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                14.     to the Holders of the Class MF-7 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                15.     to the Holders of the Class MF-7 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                16.     to the Holders of the Class BF Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                17.     to the Holders of the Class BF Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                18.     to the Carryover Reserve Fund and from the Carryover
                        Reserve Fund to each Class of Class AF Certificates
                        and Fixed Rate Subordinate Certificates (in the case
                        of the Class AF-1 Certificates after application of
                        amounts received under the Class AF-1 Corridor
                        Contract to cover Net Rate Carryover), pro rata based
                        on the Certificate Principal Balances thereof, to the
                        extent needed to pay any unpaid Net Rate Carryover for
                        each such Class; and then any Fixed Rate Loan Group
                        Excess Cashflow remaining after such allocation to pay
                        Net Rate Carryover based on the Certificate Principal
                        Balances of the Certificates shall be distributed to
                        each Class of Class AF Certificates and Fixed Rate
                        Subordinate Certificates with respect to which there
                        remains any unpaid Net Rate Carryover, pro rata, based
                        on the amount of such unpaid Net Rate Carryover;

                19.     on or after the Distribution Date in January 2005, if
                        the Adjustable Rate Overcollateralization Target
                        Amount has at any previous time been met, to the
                        Holders of the Class or Classes of Class AV
                        Certificates and Adjustable Rate Subordinate
                        Certificates then entitled to receive



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<PAGE>

                        distributions in respect of principal, payable to such
                        Holders as part of the Principal Distribution Amount
                        as described under Section 4.04(d) above, in an amount
                        equal to the Extra Principal Distribution Amount for
                        Loan Group 2 and Loan Group 3 not covered by the
                        Adjustable Rate Loan Group Excess Cashflow allocated
                        pro rata based on the Extra Principal Distribution
                        Amount for Loan Group 2 and Loan Group 3 not covered
                        by the Adjustable Rate Loan Group Excess Cashflow;

                20.     to the Holders of the Class MV-1 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MV-1 Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;

                21.     to the Holders of the Class MV-2 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MV-2 Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;

                22.     to the Holders of the Class MV-3 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MV-3 Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;

                23.     to the Holders of the Class MV-4 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MV-4 Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;

                24.     to the Holders of the Class MV-5 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MV-5 Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;

                25.     to the Holders of the Class MV-6 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MV-6 Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;

                26.     to the Holders of the Class MV-7 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MV-7 Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;

                27.     to the Holders of the Class MV-8 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MV-8 Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;



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<PAGE>

                28.     to the Holders of the Class BV Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class BV Certificates remaining undistributed
                        after application of the Adjustable Rate Loan Group
                        Excess Cashflow;

                29.     to the Carryover Reserve Fund, in an amount equal to
                        the Required Secondary Carryover Reserve Fund Deposit
                        (after giving effect to other deposits and withdrawals
                        therefrom on such Distribution Date without regard to
                        any excess Corridor Contract proceeds);

                30.     to the Class CF Certificateholders, the Class CF
                        Distributable Amount for such Distribution Date; and

                31.     to the Class A-R Certificates, any remaining amount.

               (f) With respect to any Distribution Date, any Adjustable Rate
Loan Group Excess Cashflow shall be paid to the Classes of Certificates in the
following order of priority, in each case to the extent of remaining
Adjustable Rate Loan Group Excess Cashflow:

                1.      to the Holders of the Class or Classes of Class AV
                        Certificates and Adjustable Rate Subordinate
                        Certificates then entitled to receive distributions in
                        respect of principal, in an aggregate amount equal to
                        the Extra Principal Distribution Amount for the
                        Adjustable Rate Loan Group, payable to such Holders of
                        each such Class as part of the Principal Distribution
                        Amount pursuant to Section 4.04(d) above;

                2.      to the Holders of the Class MV-1 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                3.      to the Holders of the Class MV-1 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                4.      to the Holders of the Class MV-2 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                5.      to the Holders of the Class MV-2 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                6.      to the Holders of the Class MV-3 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                7.      to the Holders of the Class MV-3 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                8.      to the Holders of the Class MV-4 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;



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<PAGE>

                9.      to the Holders of the Class MV-4 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                10.     to the Holders of the Class MV-5 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                11.     to the Holders of the Class MV-5 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                12.     to the Holders of the Class MV-6 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                13.     to the Holders of the Class MV-6 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                14.     to the Holders of the Class MV-7 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                15.     to the Holders of the Class MV-7 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                16.     to the Holders of the Class MV-8 Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                17.     to the Holders of the Class MV-8 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                18.     to the Holders of the Class BV Certificates, in an
                        amount equal to any Interest Carry Forward Amount for
                        such Class;

                19.     to the Holders of the Class BV Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        such Class;

                20.     to the Carryover Reserve Fund and from the Carryover
                        Reserve Fund to each Class of Class AV Certificates
                        and Adjustable Rate Subordinate Certificates (in each
                        case after application of amounts received under the
                        applicable Corridor Contract to cover Net Rate
                        Carryover), pro rata based on the Certificate
                        Principal Balances thereof, to the extent needed to
                        pay any Net Rate Carryover for each such Class
                        remaining after application of amounts under the
                        applicable Corridor Contract; provided that any
                        Adjustable Rate Loan Group Excess Cashflow remaining
                        after such allocation to pay Net Rate Carryover based
                        on the Certificate Principal Balances of the
                        Certificates shall be distributed to each Class of
                        Class AV Certificates and Adjustable Rate Subordinate
                        Certificates with respect to which there remains any
                        unpaid Net Rate Carryover (after the distribution
                        based on Certificate Principal Balances), pro rata,
                        based on the amount of such unpaid Net Rate Carryover;



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<PAGE>

                21.     on or after the Distribution Date in January 2005, if
                        the Fixed Rate Overcollateralization Target Amount has
                        at any previous time been met, to the Holders of the
                        Class or Classes of Class AF Certificates and Fixed
                        Rate Subordinate Certificates then entitled to receive
                        distributions in respect of principal, payable to such
                        Holders as part of the Principal Distribution Amount
                        pursuant to Section 4.04(c) above, in an amount equal
                        to the Extra Principal Distribution Amount for Loan
                        Group 1 not covered by the Fixed Rate Loan Group
                        Excess Cashflow or Credit Comeback Excess Cashflow;

                22.     to the Holders of the Class MF-1 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MF-1 Certificates remaining undistributed
                        after application of the Fixed Rate Loan Group Excess
                        Cashflow and Credit Comeback Excess Cashflow;

                23.     to the Holders of the Class MF-2 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MF-2 Certificates remaining undistributed
                        after application of the Fixed Rate Loan Group Excess
                        Cashflow and Credit Comeback Excess Cashflow;

                24.     to the Holders of the Class MF-3 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MF-3 Certificates remaining undistributed
                        after application of the Fixed Rate Loan Group Excess
                        Cashflow and Credit Comeback Excess Cashflow;

                25.     to the Holders of the Class MF-4 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MF-4 Certificates remaining undistributed
                        after application of the Fixed Rate Loan Group Excess
                        Cashflow and Credit Comeback Excess Cashflow;

                26.     to the Holders of the Class MF-5 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MF-5 Certificates remaining undistributed
                        after application of the Fixed Rate Loan Group Excess
                        Cashflow and Credit Comeback Excess Cashflow;

                27.     to the Holders of the Class MF-6 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MF-6 Certificates remaining undistributed
                        after application of the Fixed Rate Loan Group Excess
                        Cashflow and Credit Comeback Excess Cashflow;

                28.     to the Holders of the Class MF-7 Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class MF-7 Certificates remaining undistributed
                        after application of the Fixed Rate Loan Group Excess
                        Cashflow and Credit Comeback Excess Cashflow;

                29.     to the Holders of the Class BF Certificates, in an
                        amount equal to the Unpaid Realized Loss Amount for
                        the Class BF Certificates remaining



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<PAGE>

                        undistributed after application of the Fixed Rate Loan
                        Group Excess Cashflow and Credit Comeback Excess
                        Cashflow;

                30.     to the Carryover Reserve Fund, in an amount equal to
                        the Required Secondary Carryover Reserve Fund Deposit
                        (after giving effect to other deposits and withdrawals
                        therefrom on such Distribution Date without regard to
                        any excess Corridor Contract proceeds);

                31.     to the Class CV Certificateholders, the Class CV
                        Distributable Amount for such Distribution Date; and

                32.     to the Class A-R Certificates, any remaining amount.

               (g) On each Distribution Date on or prior to each Corridor
Contract Termination Date, amounts received by the Trustee in respect of each
Corridor Contract for such Distribution Date shall be withdrawn from the
Carryover Reserve Fund and distributed:

                       (1) in the case of any such amounts received on the
        Class AF-1 Corridor Contract, to the Class AF-1 Certificates to the
        extent needed to pay any Net Rate Carryover with respect to such
        Class;

                       (2) in the case of any such amounts received on the
        Class 1-AV-1 Corridor Contract, to the Class 1-AV-1 Certificates to
        the extent needed to pay any Net Rate Carryover with respect to such
        Class;

                       (3) in the case of any such amounts received on the
        Class 2-AV Corridor Contract, concurrently to each Class of Class 2-AV
        Certificates, pro rata, based on the Certificate Principal Balances
        thereof, to the extent needed to pay any Net Rate Carryover for each
        such Class; and then, any amounts remaining after such allocation to
        pay Net Rate Carryover based on the Certificate Principal Balances of
        the Class 2-AV Certificates shall be distributed to each Class of
        Class 2-AV Certificates to the extent needed to pay any remaining
        unpaid Net Rate Carryover, pro rata, based on the amount of such
        remaining unpaid Net Rate Carryover;

                       (4) in the case of any such amounts received on the
        Adjustable Rate Subordinate Corridor Contract, concurrently to each
        Class of Adjustable Rate Subordinate Certificates, pro rata, based on
        the Certificate Principal Balances thereof, to the extent needed to
        pay any Net Rate Carryover for each such Class; and then, any amounts
        remaining after such allocation to pay Net Rate Carryover based on the
        Certificate Principal Balances of the Adjustable Rate Subordinate
        Certificates shall be distributed to each Class of Adjustable Rate
        Subordinate Certificates to the extent needed to pay any remaining
        unpaid Net Rate Carryover, pro rata, based on the amount of such
        remaining unpaid Net Rate Carryover; and

                       (5) any remaining amounts to the Holders of the Class C
        Certificates as provided in Section 4.08(c).



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<PAGE>

               (h) To the extent that a Class of Interest Bearing Certificates
receives interest in excess of the Net Rate Cap, such interest shall be deemed
to have been paid to the Carryover Reserve Fund and then paid by the Carryover
Reserve Fund to those Certificateholders. For purposes of the Code, amounts
deemed deposited in the Carryover Reserve Fund shall be deemed to have first
been distributed (i) in the case of any such amounts relating to the Class
AF-1 Corridor Contract, the Class CF Certificates, and (ii) in the case of any
such amounts relating to the Class 1-AV-1 Corridor Contract, the Class 2-AV
Corridor Contract and the Adjustable Rate Subordinate Corridor Contract, the
Class CV Certificates.

               (i) On each Distribution Date, all Prepayment Charges
(including amounts deposited in connection with the full or partial waiver of
such Prepayment Charges pursuant to Section 3.20) with respect to Loan Group 1
shall be allocated to the Class PF Certificates. On each Distribution Date,
all Prepayment Charges (including amounts deposited in connection with the
full or partial waiver of such Prepayment Charges pursuant to Section 3.20)
with respect to Loan Group 2 and Loan Group 3 shall be allocated to the Class
PV Certificates. On the Class PF Principal Distribution Date, the Trustee
shall make the $100.00 distribution to the Class PF Certificates as specified
in Section 3.08. On the Class PV Principal Distribution Date, the Trustee
shall make the $100.00 distribution to the Class PV Certificates as specified
in Section 3.08.

               (j) On each Distribution Date, the Trustee shall allocate any
Applied Realized Loss Amount for Loan Group 1 to reduce the Certificate
Principal Balances of the Fixed Rate Subordinate Certificates in the following
order of priority:

                       (1) to the Class BF Certificates until the Certificate
        Principal Balance thereof is reduced to zero;

                       (2) to the Class MF-7 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (3) to the Class MF-6 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (4) to the Class MF-5 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (5) to the Class MF-4 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (6) to the Class MF-3 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (7) to the Class MF-2 Certificates until the
        Certificate Principal Balance thereof is reduced to zero; and

                       (8) to the Class MF-1 Certificates until the
        Certificate Principal Balance thereof is reduced to zero.



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<PAGE>

               (k) On each Distribution Date, the Trustee shall allocate any
Applied Realized Loss Amount for Loan Group 2 and Loan Group 3 to reduce the
Certificate Principal Balances of the Adjustable Rate Subordinate Certificates
in the following order of priority:

                       (1) to the Class BV Certificates until the Certificate
        Principal Balance thereof is reduced to zero;

                       (2) to the Class MV-8 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (3) to the Class MV-7 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (4) to the Class MV-6 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (5) to the Class MV-5 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (6) to the Class MV-4 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (7) to the Class MV-3 Certificates until the
        Certificate Principal Balance thereof is reduced to zero;

                       (8) to the Class MV-2 Certificates until the
        Certificate Principal Balance thereof is reduced to zero; and

                       (9) to the Class MV-1 Certificates until the
        Certificate Principal Balance thereof is reduced to zero.

               (l) On each Distribution Date, the Trustee shall allocate the
amount of the Subsequent Recoveries for Loan Group 1, if any, to increase the
Certificate Principal Balances of the Fixed Rate Subordinate Certificates to
which Applied Realized Loss Amounts have been previously allocated in the
following order of priority:

                       (1) to the Class MF-1 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MF-1
        Certificates;

                       (2) to the Class MF-2 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MF-2
        Certificates;

                       (3) to the Class MF-3 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MF-3
        Certificates;

                       (4) to the Class MF-4 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MF-4
        Certificates;



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<PAGE>

                       (5) to the Class MF-5 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MF-5
        Certificates;

                       (6) to the Class MF-6 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MF-6
        Certificates;

                       (7) to the Class MF-7 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MF-7
        Certificates; and

                       (8) to the Class BF Certificates, but not by more than
        the amount of the Unpaid Realized Loss Amount of the Class BF
        Certificates.

               (m) On each Distribution Date, the Trustee shall allocate the
amount of the Subsequent Recoveries for Loan Group 2 and Loan Group 3, if any,
to increase the Certificate Principal Balances of the Adjustable Rate
Subordinate Certificates to which Applied Realized Loss Amounts have been
previously allocated in the following order of priority:

                       (1) to the Class MV-1 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MV-1
        Certificates;

                       (2) to the Class MV-2 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MV-2
        Certificates;

                       (3) to the Class MV-3 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MV-3
        Certificates;

                       (4) to the Class MV-4 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MV-4
        Certificates;

                       (5) to the Class MV-5 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MV-5
        Certificates;

                       (6) to the Class MV-6 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MV-6
        Certificates;

                       (7) to the Class MV-7 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MV-7
        Certificates;

                       (8) to the Class MV-8 Certificates, but not by more
        than the amount of the Unpaid Realized Loss Amount of the Class MV-8
        Certificates;

                       (9) to the Class BV Certificates, but not by more than
        the amount of the Unpaid Realized Loss Amount of the Class BV
        Certificates;

Holders of Certificates to which any Subsequent Recoveries have been allocated
shall not be entitled to any payment in respect of Current Interest on the
amount of such increases for any Accrual Period preceding the Distribution
Date on which such increase occurs.




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<PAGE>

               Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either by
wire transfer in immediately available funds to the account of such Holder at
a bank or other entity having appropriate facilities therefor, if (i) such
Holder has so notified the Trustee at least five Business Days prior to the
related Record Date and (ii) such Holder shall hold Regular Certificates with
an aggregate initial Certificate Principal Balance of not less than $1,000,000
or evidencing a Percentage Interest aggregating 10% or more with respect to
such Class or, if not, by check mailed by first class mail to such
Certificateholder at the address of such Holder appearing in the Certificate
Register. Notwithstanding the foregoing, but subject to Section 9.02 hereof
respecting the final distribution, distributions with respect to Certificates
registered in the name of a Depository shall be made to such Depository in
immediately available funds.

               Payments to the Class 1-AV-1 Insurer shall be made by wire
transfer of immediately available funds to the following account, unless the
Class 1-AV-1 Insurer notifies the Trustee in writing: Account Name: MBIA
Insurance Corporation, Account Number: 910-2-721728, Bank - JPMorgan Chase
Bank, ABA Number 021-000-021, Re: Countrywide 2004-12 - Policy 45328 Class
1-AV-1.

               On or before 5:00 p.m. Pacific time on the fifth Business Day
following each Determination Date (but in no event later than 5:00 p.m.
Pacific time on the third Business Day before the related Distribution Date),
the Master Servicer shall deliver a report to the Trustee (in the form of a
computer readable magnetic tape or by such other means as the Master Servicer
and the Trustee may agree from time to time) containing such data and
information as agreed to by the Master Servicer and the Trustee (including,
without limitation, the actual mortgage rate for each Credit Comeback Loan)
such as to permit the Trustee to prepare the Monthly Statement to
Certificateholders and make the required distributions for the related
Distribution Date (the "Remittance Report"). The Trustee shall not be
responsible to recompute, recalculate or verify information provided to it by
the Master Servicer and shall be permitted to conclusively rely on any
information provided to it by the Master Servicer.

               Section 4.05 Monthly Statements to Certificateholders.

               (a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Holder of a
Class of Certificates of the Trust Fund, the Master Servicer, each Seller, the
Class 1-AV-1 Insurer and the Depositor a statement setting forth for the
Certificates:

                       (1) the amount of the related distribution to Holders
        of each Class allocable to principal, separately identifying (A) the
        aggregate amount of any Principal Prepayments included therein and (B)
        the aggregate of all scheduled payments of principal included therein;

                       (2) the amount of such distribution to Holders of each
        Class allocable to interest;

                       (3) any Interest Carry Forward Amount for each Class;



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<PAGE>

                       (4) the Certificate Principal Balance of each Class
        after giving effect (i) to all distributions allocable to principal on
        such Distribution Date, (ii) the allocation of any Applied Realized
        Loss Amounts for such Distribution Date and (iii) the allocation of
        any Subsequent Recoveries for such Distribution Date;

                       (5) the aggregate Stated Principal Balance of the
        Mortgage Loans for the Mortgage Pool and each Loan Group;

                       (6) the related amount of the Servicing Fees paid to or
        retained by the Master Servicer for the related Due Period;

                       (7) the Pass-Through Rate for each Class of
        Certificates with respect to the current Accrual Period;

                       (8) the Net Rate Carryover paid on any Class of
        Certificates on such Distribution Date and any Net Rate Carryover
        remaining on any Class of Certificates on such Distribution Date;

                       (9) the amount of Advances for each Loan Group included
        in the distribution on such Distribution Date;

                       (10) the number and aggregate principal amounts of
        Mortgage Loans in each Loan Group: (A) Delinquent (exclusive of
        Mortgage Loans in foreclosure) (1) 30 to 59 days, (2) 60 to 89 days
        and (3) 90 or more days, and (B) in foreclosure and Delinquent (1) 30
        to 59 days, (2) 60 to 89 days and (3) 90 or more days, in each case as
        of the close of business on the last day of the calendar month
        preceding such Distribution Date;

                       (11) with respect to any Mortgage Loan that became an
        REO Property during the preceding calendar month in each Loan Group,
        the loan number and Stated Principal Balance of such Mortgage Loan and
        the date of acquisition thereof;

                       (12) the total number and Stated Principal Balance of
        any Mortgage Loans converted to REO Properties in each Loan Group as
        of the close of business on the Determination Date preceding such
        Distribution Date;

                       (13) the aggregate Stated Principal Balance of all
        Liquidated Mortgage Loans;

                       (14) with respect to any Liquidated Mortgage Loan in
        each Loan Group, the loan number and Stated Principal Balance relating
        thereto;

                       (15) whether a Fixed Rate Trigger Event or an
        Adjustable Rate Trigger Event has occurred;

                       (16) the amount of the distribution made to the Holders
        of the Class P Certificates;

                       (17) [Reserved];



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<PAGE>

                       (18) the amount, if any, of Realized Losses and
        Subsequent Recoveries allocated to the Fixed Rate Subordinate
        Certificates and the Adjustable Rate Subordinate Certificates for such
        Distribution Date;

                       (19) the amount, if any, received under each
        Corridor Contract for such Distribution Date;

                       (20) all payments made by the Master Servicer in
        respect of Compensating Interest for such Distribution Date;

                       (21) the information set forth in the Prepayment Charge
        Schedule;

                       (22) with respect to any Mortgage Loan repurchased by a
        Seller or purchased by the Depositor, Master Servicer, the loan number
        and Stated Principal Balance relating thereto; and

                       (23) the amounts paid by the Class 1-AV-1 Insurer for
        such Distribution Date; and

                       (24) all amounts paid to the Class 1-AV-1 Insurer in
        respect of any Class 1-AV-1 Premiums payable with respect to the Class
        1-AV-1 Policy and any Class 1-AV-1 Reimbursement Amounts paid to the
        Class 1-AV-1 Insurer.

               (b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer.
The Trustee shall send a copy of each statement provided pursuant to this
Section 4.05 to each Rating Agency, the Class 1-AV-1 Insurer and the NIM
Insurer. The Trustee may make the above information available to
Certificateholders and the Class 1-AV-1 Insurer via the Trustee's website at
http://www.bnyinvestorreporting.com.

               (c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at
any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(1), (a)(2) and (a)(6) of
this Section 4.05 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time in effect.

               (d) Upon filing with the Internal Revenue Service, the Trustee
shall furnish to the Holders of the Class A-R Certificates the Form 1066 and
each Form 1066Q and shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class A-R Certificates with respect
to the following matters:

                       (1) The original projected principal and interest cash
        flows on the Closing Date on each related Class of regular and
        residual interests created hereunder and on the Mortgage Loans, based
        on the Prepayment Assumption;



                                     131
<PAGE>

                       (2) The projected remaining principal and interest cash
        flows as of the end of any calendar quarter with respect to each
        related Class of regular and residual interests created hereunder and
        the Mortgage Loans, based on the Prepayment Assumption;

                       (3) The applicable Prepayment Assumption and any
        interest rate assumptions used in determining the projected principal
        and interest cash flows described above;

                       (4) The original issue discount (or, in the case of the
        Mortgage Loans, market discount) or premium accrued or amortized
        through the end of such calendar quarter with respect to each related
        Class of regular or residual interests created hereunder and to the
        Mortgage Loans, together with each constant yield to maturity used in
        computing the same;

                       (5) The treatment of losses realized with respect to
        the Mortgage Loans or the regular interests created hereunder,
        including the timing and amount of any cancellation of indebtedness
        income of the related REMIC with respect to such regular interests or
        bad debt deductions claimed with respect to the Mortgage Loans;

                       (6) The amount and timing of any non-interest expenses
        of the related REMIC; and

                       (7) Any taxes (including penalties and interest)
        imposed on the related REMIC, including, without limitation, taxes on
        "prohibited transactions," "contributions" or "net income from
        foreclosure property" or state or local income or franchise taxes.

               The information pursuant to clauses (1), (2), (3) and (4) above
shall be provided by the Depositor pursuant to Section 8.11.

               Section 4.06 Class 1-AV-1 Policy; Rights of the Class 1-AV-1
                            Insurer.

               (a) If, on the third Business Day before any Distribution Date,
the Trustee determines that the amounts available for such Distribution Date
distributable to the Holders of the Class 1-AV-1 Certificates pursuant to
Section 4.04 will be insufficient to pay the related Required Distributions on
such Distribution Date, the Trustee shall determine the amount of any such
deficiency and shall give notice to the Class 1-AV-1 Insurer and the Fiscal
Agent, if any, by telephone or telecopy of the amount of such deficiency,
confirmed in writing by notice substantially in the form of Exhibit A to the
Class 1-AV-1 Policy, by 12:00 noon, New York City time on such third Business
Day. The Trustee's responsibility for delivering the notice to the Class
1-AV-1 Insurer as provided in the preceding sentence is limited to the
availability, timeliness and accuracy of the information provided by the
Master Servicer.

               (b) In the event the Trustee receives a certified copy of an
order of the appropriate court that any scheduled payment of principal or
interest on a Class 1-AV-1 Certificate has been voided in whole or in part as
a preference payment under applicable bankruptcy law, the Trustee shall (i)
promptly notify the Class 1-AV-1 Insurer and the Fiscal Agent, if any, and
(ii) comply with the provisions of the Class 1-AV-1 Policy, to obtain payment




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<PAGE>

by the Class 1-AV-1 Insurer of such voided scheduled payment. In addition, the
Trustee shall mail notice to all Holders of the Class 1-AV-1 Certificates so
affected that, in the event that any such Holder's scheduled payment is so
recovered, such Holder will be entitled to payment pursuant to the terms of
the Class 1-AV-1 Policy, a copy of which shall be made available to such
Holders by the Trustee. The Trustee shall furnish to the Class 1-AV-1 Insurer
and the Fiscal Agent, if any, its records listing the payments on the affected
Class 1-AV-1 Certificates, if any, that have been made by the Trustee and
subsequently recovered from the affected Holders, and the dates on which such
payments were made by the Trustee.

               (c) At the time of the execution hereof, and for the purposes
hereof, the Trustee shall establish a special purpose trust account in the
name of the Trustee for the benefit of Holders of the Class 1-AV-1
Certificates (the "Class 1-AV-1 Policy Payments Account") over which the
Trustee shall have exclusive control and sole right of withdrawal. The Class
1-AV-1 Policy Payments Account shall be an Eligible Account. The Trustee shall
deposit any amount paid under the Class 1-AV-1 Policy into the Class 1-AV-1
Policy Payments Account and distribute such amount only for the purposes of
making the payments to Holders of the Class 1-AV-1 Certificates, in respect of
the related Required Distributions for which the related claim was made under
the Class 1-AV-1 Policy. Such amounts shall be allocated by the Trustee to
Holders of Class 1-AV-1 Certificates affected by such shortfalls in the same
manner as principal and interest payments are to be allocated with respect to
such Certificates pursuant to Section 4.04. It shall not be necessary for such
payments to be made by checks or wire transfers separated from the checks or
wire transfers used to make regular payments hereunder with funds withdrawn
from the Distribution Account. However, any payments made on the Class 1-AV-1
Certificates from funds in the Class 1-AV-1 Policy Payments Account shall be
noted as provided in subsection (e) below. Funds held in the Class 1-AV-1
Policy Payments Account shall not be invested by the Trustee.

               (d) Any funds received from the Class 1-AV-1 Insurer for
deposit into the Class 1-AV-1 Policy Payments Account pursuant to the Class
1-AV-1 Policy in respect of a Distribution Date or otherwise as a result of
any claim under the Class 1-AV-1 Policy shall be applied by the Trustee
directly to the payment in full (i) of the related Required Distributions due
on such Distribution Date on the Class 1-AV-1 Certificates, or (ii) of other
amounts payable under the Class 1-AV-1 Policy. Funds received by the Trustee
as a result of any claim under the Class 1-AV-1 Policy shall be used solely
for payment to the Holders of the Class 1-AV-1 Certificates and may not be
applied for any other purpose, including, without limitation, satisfaction of
any costs, expenses or liabilities of the Trustee, the Master Servicer or the
Trust Fund. Any funds remaining in the Class 1-AV-1 Policy Payments Account on
the first Business Day after each Distribution Date shall be remitted promptly
to the Class 1-AV-1 Insurer in accordance with the instructions set forth in
Section 4.04(m).

               (e) The Trustee shall keep complete and accurate records in
respect of (i) all funds remitted to it by the Class 1-AV-1 Insurer and
deposited into the Class 1-AV-1 Policy Payments Account and (ii) the
allocation of such funds to (A) payments of interest on and principal in
respect of any Class 1-AV-1 Certificates and (B) the amount of funds available
to make distributions on the Class 1-AV-1 Certificates pursuant to Sections
4.04(b), (d), (e) and (f). The Class 1-AV-1 Insurer shall have the right to
inspect such records at reasonable times during normal business hours upon
three Business Days' prior notice to the Trustee.



                                     133
<PAGE>

               (f) The Trustee acknowledges, and each Holder of a Class 1-AV-1
Certificate by its acceptance of the Class 1-AV-1 Certificate agrees, that,
without the need for any further action on the part of the Class 1-AV-1
Insurer or the Trustee, to the extent the Class 1-AV-1 Insurer makes payments,
directly or indirectly, on account of principal of or interest on any Class
1-AV-1 Certificates, the Class 1-AV-1 Insurer will be fully subrogated to the
rights of the Holders of such Class 1-AV-1 Certificates to receive such
principal and interest from the Trust Fund. The Holders of the Class 1-AV-1
Certificates, by acceptance of the Class 1-AV-1 Certificates, assign their
rights as Holders of the Class 1-AV-1 Certificates to the extent of the Class
1-AV-1 Insurer's interest with respect to amounts paid under the Class 1-AV-1
Policy. Anything herein to the contrary notwithstanding, solely for purposes
of determining the Class 1-AV-1 Insurer's rights, as applicable, as subrogee
for payments distributable pursuant to Section 4.04, any payment with respect
to distributions to the Class 1-AV-1 Certificates which is made with funds
received pursuant to the terms of the Class 1-AV-1 Policy shall not be
considered payment of the Class 1-AV-1 Certificates from the Trust Fund and
shall not result in the distribution or the provision for the distribution in
reduction of the Certificate Principal Balance of the Class 1-AV-1
Certificates within the meaning of Article IV.

               (g) Upon its becoming aware of the occurrence of an Event of
Default, the Trustee shall promptly notify the Class 1-AV-1 Insurer of such
Event of Default.

               (h) The Trustee shall promptly notify the Class 1-AV-1 Insurer
of either of the following as to which it has actual knowledge: (A) the
commencement of any proceeding by or against the Depositor commenced under the
United States bankruptcy code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") and
(B) the making of any claim in connection with any Insolvency Proceeding
seeking the avoidance as a preferential transfer (a "Preference Claim") of any
distribution made with respect to the Class 1-AV-1 Certificates as to which it
has actual knowledge. Each Holder of a Class 1-AV-1 Certificate, by its
purchase of Class 1-AV-1 Certificates, and the Trustee hereby agrees that the
Class 1-AV-1 Insurer (so long as no Class 1-AV-1 Insurer Default exists) may
at any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the Class 1-AV-1 Insurer shall be subrogated to the rights of the
Trustee and each Holder of a Class 1-AV-1 Certificate in the conduct of any
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in
connection with any such Preference Claim.

               (i) The Master Servicer shall designate a Class 1-AV-1 Insurer
Contact Person who shall be available to the Class 1-AV-1 Insurer to provide
reasonable access to information regarding the Mortgage Loans. The initial
Class 1-AV-1 Insurer Contact Person is to the attention of Secondary
Marketing.

               (j) The Trustee shall surrender the Class 1-AV-1 Policy to the
Class 1-AV-1 Insurer for cancellation upon the reduction of the Certificate
Principal Balance of the Class 1-AV-1 Certificates to zero.



                                     134
<PAGE>

               (k) The Trustee shall send to the Class 1-AV-1 Insurer the
reports prepared pursuant to Sections 3.17 and 3.18 and the statements
prepared pursuant to Section 4.05, as well as any other statements or
communications sent to Holders of the Class 1-AV-1 Certificates, in each case
at the same time such reports, statements and communications are otherwise
sent.

               (l) For so long as no Class 1-AV-1 Insurer Default shall have
occurred and be continuing, each Holder of a Class 1-AV-1 Certificate agrees
that the Class 1-AV-1 Insurer shall be treated by the Depositor, the Master
Servicer and the Trustee as if the Class 1-AV-1 Insurer were the Holder of all
of the Class 1-AV-1 Certificates, for the purpose (and solely for the purpose)
of the giving of any consent, the making of any direction or the exercise of
any voting or other control rights otherwise given to the Holders of the Class
1-AV-1 Certificates hereunder.

               (m) With respect to this Section 4.06, (i) the terms "Receipt"
and "Received" shall mean actual delivery to the Class 1-AV-1 Insurer and the
Fiscal Agent, if any, prior to 12:00 noon, New York City time, on a Business
Day; delivery either on a day that is not a Business Day or after 12:00 noon,
New York City time, shall be deemed to be Receipt on the next succeeding
Business Day. If any notice or certificate given under the Class 1-AV-1 Policy
by the Trustee is not in proper form or is not properly completed, executed or
delivered, it shall be deemed not to have been Received. The Class 1-AV-1
Insurer or the Fiscal Agent, if any, shall promptly so advise the Trustee and
the Trustee may submit an amended notice.

               (n) All notices, statements reports, certificates or opinions
required by this Agreement to be sent to the Rating Agencies or the Class
1-AV-1 Certificateholders shall also be sent at such time to the Class 1-AV-1
Insurer at the notice address set forth in Section 10.05.

               (o) The Class 1-AV-1 Insurer shall be an express third party
beneficiary of this Agreement for the purpose of enforcing the provisions
hereof to the extent of the Class 1-AV-1 Insurer's rights explicitly specified
herein as if a party hereto.

               (p) All references herein to the ratings assigned to the
Certificates and to the interests of any Certificateholders shall be without
regard to the Class 1-AV-1 Policy, in the case of the Class 1-AV-1
Certificates.

               Section 4.07 [Reserved].

               Section 4.08 Carryover Reserve Fund.

               (a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the
Certificates, the Carryover Reserve Fund and shall deposit $10,000 therein.
The Carryover Reserve Fund shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled
with, any other moneys, including without limitation, other moneys held by the
Trustee pursuant to this Agreement.

               (b) On each Distribution Date, the Trustee shall deposit all
amounts received pursuant to the Corridor Contracts in the Carryover Reserve
Fund. The Trustee shall make withdrawals from the Carryover Reserve Fund to
make distributions in respect of Net Rate Carryover as to the extent required
by Section 4.04.



                                     135
<PAGE>

               (c) Any amounts received on the Class AF-1 Corridor Contract,
the Class 1-AV-1 Corridor Contract, the Class 2-AV Corridor Contract and the
Adjustable Rate Subordinate Corridor Contract with respect to a Distribution
Date and remaining after the distributions required pursuant to Section
4.04(g) shall be distributed (i) in the case of any such amounts relating to
the Class AF-1 Corridor Contract, to the Class CF Certificates, and (ii) in
the case of any such amounts relating to the Class 1-AV-1 Corridor Contract,
the Class 2-AV Corridor Contract and the Adjustable Rate Subordinate Corridor
Contract, to the CV Certificates; provided, however, that if the Class AF-1
Corridor Contract, the Class 1-AV-1 Corridor Contract, the Class 2-AV Corridor
Contract and the Adjustable Rate Subordinate Corridor Contract is subject to
early termination, early termination payments received on such Corridor
Contract shall be deposited by the Trustee in the Carryover Reserve Fund and
withdrawn from the Carryover Reserve Fund to pay any Net Rate Carryover for
the applicable Classes of Certificates as provided in Section 4.04(g) on the
Distribution Dates following such termination to and including the applicable
Corridor Contract Termination Date, but such early termination payments shall
not be available for distribution to the Class C Certificates on future
Distribution Dates until the applicable Corridor Contract Termination Date.

               (d) (1) Funds in the Carryover Reserve Fund in respect of
amounts received of under the Class AF-1 Corridor Contract may be invested in
Permitted Investments at the written direction of the Majority Holder of the
Class CF Certificates (voting as a single Class), which Permitted Investments
shall mature not later than the Business Day immediately preceding the first
Distribution Date that follows the date of such investment (except that if
such Permitted Investment is an obligation of the institution that maintains
the Carryover Reserve Fund, then such Permitted Investment shall mature not
later than such Distribution Date) and shall not be sold or disposed of prior
to maturity. All such Permitted Investments shall be made in the name of the
Trustee, for the benefit of the Certificateholders. In the absence of such
written direction, all funds in the Carryover Reserve Fund in respect of
amounts received of under the Class AF-1 Corridor Contract shall be invested
by the Trustee in The Bank of New York cash reserves. Any net investment
earnings on such amounts shall be payable pro rata to the Holders of the Class
CF Certificates in accordance with their Percentage Interests. Any losses
incurred in the Carryover Reserve Fund in respect of any such investments
shall be charged against amounts on deposit in the Carryover Reserve Fund (or
such investments) immediately as realized.

                       (2) Funds in the Carryover Reserve Fund in respect of
        amounts received of under the Class 1-AV-1 Corridor Contract, the
        Class 2-AV Corridor Contract and the Adjustable Rate Subordinate
        Corridor Contract may be invested in Permitted Investments at the
        written direction of the Majority Holder of the Class CV Certificates
        (voting as a single Class), which Permitted Investments shall mature
        not later than the Business Day immediately preceding the first
        Distribution Date that follows the date of such investment (except
        that if such Permitted Investment is an obligation of the institution
        that maintains the Carryover Reserve Fund, then such Permitted
        Investment shall mature not later than such Distribution Date) and
        shall not be sold or disposed of prior to maturity. All such Permitted
        Investments shall be made in the name of the Trustee, for the benefit
        of the Certificateholders. In the absence of such written direction,
        all funds in the Carryover Reserve Fund in respect of amounts received
        of under the Class 1-AV-1 Corridor Contract, the Class 2-AV Corridor
        Contract and the Adjustable Rate Subordinate Corridor Contract shall
        be invested by the Trustee in The Bank of New



                                     136
<PAGE>

        York cash reserves. Any net investment earnings on such amounts shall
        be payable pro rata to the Holders of the Class CV Certificates in
        accordance with their Percentage Interests. Any losses incurred in the
        Carryover Reserve Fund in respect of any such investments shall be
        charged against amounts on deposit in the Carryover Reserve Fund (or
        such investments) immediately as realized.

                       (3) The Trustee shall not be liable for the amount of
        any loss incurred in respect of any investment or lack of investment
        of funds held in the Carryover Reserve Fund and made in accordance
        with this Section 4.08. The Carryover Reserve Fund shall not
        constitute an asset of any REMIC created hereunder. The Class C
        Certificates shall evidence ownership of the Carryover Reserve Fund
        for federal tax purposes.

               Section 4.09 Credit Comeback Excess Account.

               (a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the
Certificates, the Credit Comeback Excess Account. The Credit Comeback Excess
Account shall be an Eligible Account, and funds on deposit therein shall be
held separate and apart from, and shall not be commingled with, any other
moneys, including without limitation, other moneys held by the Trustee
pursuant to this Agreement.

               (b) On each Distribution Date, the Trustee shall deposit all
Credit Comeback Excess Amounts in the Credit Comeback Excess Account. The
Trustee shall make withdrawals from the Credit Comeback Excess Account to make
distributions as and to the extent required by Section 4.04.

               (c) Funds in the Credit Comeback Excess Account may be invested
in Permitted Investments at the written direction of the Majority Holder of
the Class CF Certificates (voting as a single Class), which Permitted
Investments shall mature not later than the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains the Credit Comeback Excess Account, then such Permitted Investment
shall mature not later than such Distribution Date) and shall not be sold or
disposed of prior to maturity. All such Permitted Investments shall be made in
the name of the Trustee, for the benefit of the Certificateholders. In the
absence of such written direction, all funds in the Credit Comeback Excess
Account shall be invested by the Trustee in The Bank of New York cash
reserves. Any net investment earnings on such amounts shall be payable pro
rata to the Holders of the Class CF Certificates in accordance with their
Percentage Interests. Any losses incurred in the Credit Comeback Excess
Account in respect of any such investments shall be charged against amounts on
deposit in the Credit Comeback Excess Account (or such investments)
immediately as realized.

               (d) The Trustee shall not be liable for the amount of any loss
incurred in respect of any investment or lack of investment of funds held in
the Credit Comeback Excess Account and made in accordance with this Section
4.09. The Credit Comeback Excess Account shall not constitute an asset of any
REMIC created hereunder. The Class CF Certificates shall evidence ownership of
the Credit Comeback Excess Account for federal tax purposes.



                                     137
<PAGE>

                                  ARTICLE V.
                               THE CERTIFICATES

               Section 5.01 The Certificates.

               The Certificates shall be substantially in the forms attached
hereto as Exhibits A-1 through A-27, Exhibit B, Exhibit C, Exhibit D and
Exhibit E. The Certificates shall be issuable in registered form, in the
minimum dollar denominations, integral dollar multiples in excess thereof and
aggregate dollar denominations as set forth in the following table:

<TABLE>
<CAPTION>

                                                  Integral Multiples in    Original Certificate
         Class             Minimum Denomination     Excess of Minimum       Principal Balance
------------------------- ----------------------- ----------------------- -----------------------
<S>                              <C>                      <C>                  <C>
          AF-1                   $20,000                  $1,000               $130,641,000
          AF-2                   $20,000                  $1,000                $24,939,000
          AF-3                   $20,000                  $1,000                $87,819,000
          AF-4                   $20,000                  $1,000                $32,484,000
          AF-5                   $20,000                  $1,000                $48,901,000
          AF-6                   $20,000                  $1,000                $42,400,000
          MF-1                   $20,000                  $1,000                $23,744,000
          MF-2                   $20,000                  $1,000                 $6,360,000
          MF-3                   $20,000                  $1,000                 $5,512,000
          MF-4                   $20,000                  $1,000                 $4,240,000
          MF-5                   $20,000                  $1,000                 $4,240,000
          MF-6                   $20,000                  $1,000                 $4,240,000
          MF-7                   $20,000                  $1,000                 $4,240,000
           BF                    $20,000                  $1,000                 $4,240,000
         1-AV-1                   $1,000                  $1,000             $1,010,990,000
         2-AV-1                  $20,000                  $1,000               $204,652,000
         2-AV-2                  $20,000                  $1,000               $247,131,000
         2-AV-3                  $20,000                  $1,000                $52,097,000
          MV-1                   $20,000                  $1,000                $88,172,000
          MV-2                   $20,000                  $1,000                $63,784,000
          MV-3                   $20,000                  $1,000                $43,148,000
          MV-4                   $20,000                  $1,000                $34,706,000
          MV-5                   $20,000                  $1,000                $29,078,000
          MV-6                   $20,000                  $1,000                $34,706,000
          MV-7                   $20,000                  $1,000                $26,264,000
          MV-8                   $20,000                  $1,000                $22,512,000
           BV                    $20,000                  $1,000                $18,760,000
          A-R                   $99.95(1)                  N/A                     $100
           CF                      N/A                     N/A                       N/A
</TABLE>



                                     138
<PAGE>


<TABLE>
<CAPTION>

                                                  Integral Multiples in    Original Certificate
         Class             Minimum Denomination     Excess of Minimum       Principal Balance
------------------------- ----------------------- ----------------------- -----------------------
<S>                                <C>                     <C>                     <C>
           CV                      N/A                     N/A                       N/A
           PF                      N/A                     N/A                     $100
           PV                      N/A                     N/A                     $100
</TABLE>

(1)     The Tax Matters Person Certificate may be issued in a denomination of
        $0.05.

               The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the
time when such signatures were affixed, authorized to sign on behalf of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
authentication and delivery. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form set
forth as attached hereto executed by the Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication. On the Closing Date, the Trustee shall
authenticate the Certificates to be issued at the written direction of the
Depositor, or any affiliate thereof.

               The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.

               Section 5.02 Certificate Register; Registration of Transfer and
                            Exchange of Certificates.

               (a) The Trustee shall maintain a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c)
below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration
of Transfer of any Certificate, the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of the same Class and of like aggregate Percentage Interest.

               At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Trustee duly
executed by the Holder thereof or his attorney duly authorized in writing.

               No service charge to the Certificateholders shall be made for
any registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or



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governmental charge that may be imposed in connection with any Transfer or
exchange of Certificates may be required.

               All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.

               (b) No Transfer of a Private Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under
the Securities Act and any applicable state securities laws or is exempt from
the registration requirements under the Securities Act and such state
securities laws. In the event that a transfer is to be made in reliance upon
an exemption from the Securities Act and such state securities laws, in order
to assure compliance with the Securities Act and such state securities laws,
the Certificateholder desiring to effect such Transfer and such
Certificateholder's prospective transferee shall each certify to the Trustee
in writing the facts surrounding the Transfer in substantially the forms set
forth in Exhibit J (the "Transferor Certificate") and (i) deliver a letter in
substantially the form of either Exhibit K (the "Investment Letter") or
Exhibit L (the "Rule 144A Letter") or (ii) there shall be delivered to the
Trustee at the expense of the Certificateholder desiring to effect such
transfer an Opinion of Counsel that such Transfer may be made pursuant to an
exemption from the Securities Act; provided, however, that in the case of the
delivery of an Investment Letter in connection with the transfer of any Class
C or Class P Certificate to a transferee that is formed with the purpose of
issuing notes backed by such Class C or Class P Certificate, as the case may
be, clause (b) and (c) of the form of Investment Letter shall not be
applicable and shall be deleted by such transferee. The Depositor shall
provide to any Holder of a Private Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Trustee, the
Co-Trustee and the Master Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect
such Transfer shall, and does hereby agree to, indemnify the Trustee, the
Co-Trustee, the Depositor, the Trust Fund, each Seller, the Master Servicer
and the NIM Insurer against any liability that may result if the Transfer is
not so exempt or is not made in accordance with such federal and state laws.

               No Transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
K or Exhibit L, or in the event such Certificate is a Residual Certificate,
such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I-1), to the effect that (x) such transferee is not an employee benefit plan
or arrangement subject to Section 406 of ERISA or a plan or arrangement
subject to Section 4975 of the Code, or a Person acting on



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behalf of any such plan or arrangement or using the assets of any such plan or
arrangement, or (y) in the case of an ERISA-Restricted Certificate that has
been the subject of an ERISA-Qualifying Underwriting, a representation that
the purchaser is an insurance company which is purchasing such Certificate
with funds contained in an "insurance company general account" (as such term
is defined in section V(e) of Prohibited Transaction Class Exemption 95-60
("PTCE 95-60")) and that the purchase and holding of such Certificate satisfy
the requirements for exemptive relief under Sections I and III of PTCE 95-60
or (ii) in the case of any ERISA-Restricted Certificate presented for
registration in the name of an employee benefit plan or arrangement subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or arrangement or any other person acting on behalf of any such plan or
arrangement, an Opinion of Counsel satisfactory to the Trustee to the effect
that the purchase or holding of such ERISA-Restricted Certificate will not
result in a non-exempt prohibited transaction under ERISA or the Code and will
not subject the Trustee to any obligation in addition to those expressly
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee. For purposes of the preceding sentence, one of such
representations, as appropriate, shall be deemed to have been made to the
Trustee by the transferee's acceptance of an ERISA-Restricted Certificate (or
the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA-Restricted Certificates) unless the Trustee shall have received
from the transferee an Opinion of Counsel as described in clause (ii) or a
representation acceptable in form and substance to the Trustee.
Notwithstanding anything else to the contrary herein, any purported transfer
of an ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code
without the delivery to the Trustee of an Opinion of Counsel satisfactory to
the Trustee meeting the requirements of clause (i) of the first sentence of
this paragraph as described above shall be void and of no effect. The Trustee
shall be under no liability to any Person for any registration of transfer of
any ERISA-Restricted Certificate that is in fact not permitted by this Section
5.02(b) or for making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee, with respect to the
transfer of such Classes of Certificates, required delivery of such
certificates and other documentation or evidence as are expressly required by
the terms of this Agreement and examined such certificates and other
documentation or evidence to determine compliance as to form with the express
requirements hereof. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any ERISA-Restricted Certificate that was in fact
an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code or a Person acting on
behalf of any such plan or arrangement at the time it became a Holder or, at
such subsequent time as it became such a plan or arrangement or Person acting
on behalf of such a plan or arrangement, all payments made on such
ERISA-Restricted Certificate at and after either such time. Any such payments
so recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Holder of such Certificate that is not such a plan or
arrangement or Person acting on behalf of a plan or arrangement.



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               (c) Each Person who has or who acquires any Ownership Interest
in a Class A-R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions, and the rights of each Person acquiring any Ownership Interest in
a Class A-R Certificate are expressly subject to the following provisions:

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

                       (2) No Ownership Interest in a Class A-R Certificate
        may be registered on the Closing Date or thereafter transferred, and
        the Trustee shall not register the Transfer of any Class A-R
        Certificate unless, the Trustee shall have been furnished with an
        affidavit (a "Transfer Affidavit") of the initial owner or the
        proposed transferee in the form attached hereto as Exhibit I-1.

                       (3) Each Person holding or acquiring any Ownership
        Interest in a Class A-R Certificate shall agree (A) to obtain a
        Transfer Affidavit from any other Person to whom such Person attempts
        to Transfer its Ownership Interest in a Class A-R Certificate, (B) to
        obtain a Transfer Affidavit from any Person for whom such Person is
        acting as nominee, trustee or agent in connection with any Transfer of
        a Class A-R Certificate and (C) not to Transfer its Ownership Interest
        in a Class A-R Certificate, or to cause the Transfer of an Ownership
        Interest in a Class A-R Certificate to any other Person, if it has
        actual knowledge that such Person is not a Permitted Transferee or
        that such Transfer Affidavit is false.

                       (4) Any attempted or purported Transfer of any
        Ownership Interest in a Class A-R Certificate in violation of the
        provisions of this Section 5.02(c) shall be absolutely null and void
        and shall vest no rights in the purported Transferee. If any purported
        transferee shall become a Holder of a Class A-R Certificate in
        violation of the provisions of this Section 5.02(c), then the last
        preceding Permitted Transferee shall be restored to all rights as
        Holder thereof retroactive to the date of registration of Transfer of
        such Class A-R Certificate. The Trustee shall be under no liability to
        any Person for any registration of Transfer of a Class A-R Certificate
        that is in fact not permitted by Section 5.02(b) and this Section
        5.02(c) or for making any payments due on such Certificate to the
        Holder thereof or taking any other action with respect to such Holder
        under the provisions of this Agreement so long as the Transfer was
        registered after receipt of the related Transfer Affidavit and
        Transferor Certificate. The Trustee shall be entitled but not
        obligated to recover from any Holder of a Class A-R Certificate that
        was in fact not a Permitted Transferee at the time it became a Holder
        or, at such subsequent time as it became other than a Permitted
        Transferee, all payments made on such Class A-R Certificate at and
        after either such time. Any such payments so recovered by the Trustee
        shall be paid and delivered by the Trustee to the last preceding
        Permitted Transferee of such Certificate.

                       (5) The Master Servicer shall use its best efforts to
        make available, upon receipt of written request from the Trustee, all
        information necessary to compute



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        any tax imposed under section 860E(e) of the Code as a result of a
        Transfer of an Ownership Interest in a Class A-R Certificate to any
        Holder who is not a Permitted Transferee.

               The restrictions on Transfers of a Class A-R Certificate set
forth in this section 5.02(c) shall cease to apply (and the applicable
portions of the legend on a Class A-R Certificate may be deleted) with respect
to Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, either Seller
or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC formed hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Class A-R
Certificate, by acceptance of its Ownership Interest, shall be deemed to
consent to any amendment of this Agreement that, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (a) to ensure that
the record ownership of, or any beneficial interest in, a Class A-R
Certificate is not transferred, directly or indirectly, to a Person that is
not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Class A-R Certificate that is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.

               (d) The preparation and delivery of all affidavits,
certifications and opinions referred to above in this section 5.02 shall not
be an expense of the Trust Fund, the Trustee, the Depositor, either Seller or
the Master Servicer.

               Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.

               If (a) any mutilated Certificate is surrendered to the Trustee,
or the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Certificate and of the ownership thereof and (b) there is
delivered to the Master Servicer, the Class 1-AV-1 Insurer and the Trustee
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Trustee that such Certificate
has been acquired by a bona fide purchaser, the Trustee shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time. All Certificates surrendered to the Trustee under the terms of this
Section 5.03 shall be canceled and destroyed by the Trustee in accordance with
its standard procedures without liability on its part.

               Section 5.04 Persons Deemed Owners.

               The Master Servicer, the NIM Insurer, the Class 1-AV-1 Insurer,
the Trustee and any agent of the Master Servicer, the NIM Insurer, the Class
1-AV-1 Insurer or the Trustee may treat the person in whose name any
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the purpose of receiving distributions as provided in this Agreement and for
all other purposes whatsoever, and none of the Master Servicer, the Trustee,
the Class 1-AV-1 Insurer or the NIM Insurer or any agent of the Master
Servicer, the Trustee, the Class 1-AV-1 Insurer or the NIM Insurer shall be
affected by any notice to the contrary.

               Section 5.05 Access to List of Certificateholders' Names and
                            Addresses.

               If three or more Certificateholders or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that such
Certificateholders or Certificate Owners desire to communicate with other
Certificateholders or Certificate Owners with respect to their rights under
this Agreement or under the Certificates and (c) provide a copy of the
communication that such Certificateholders or Certificate Owners propose to
transmit or if the Depositor or Master Servicer shall request such information
in writing from the Trustee, then the Trustee shall, within ten Business Days
after the receipt of such request, provide the Depositor, the Master Servicer
or such Certificateholders or Certificate Owners at such recipients' expense
the most recent list of the Certificateholders of the Trust Fund held by the
Trustee, if any. The Depositor and every Certificateholder or Certificate
Owner, by receiving and holding a Certificate, agree that the Trustee shall
not be held accountable by reason of the disclosure of any such information as
to the list of the Certificateholders hereunder, regardless of the source from
which such information was derived.

               Section 5.06 Book-Entry Certificates.

               The Book-Entry Certificates, upon original issuance, shall be
issued in the form of one typewritten Certificate (or more than one, if
required by the Depository) for each Class of such Certificates, to be
delivered to the Depository by or on behalf of the Depositor. Such
Certificates shall initially be registered on the Certificate Register in the
name of the Depository or its nominee, and no Certificate Owner of such
Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in
Section 5.08. Unless and until definitive, fully registered Certificates
("Definitive Certificates") have been issued to the Certificate Owners of such
Certificates pursuant to Section 5.08:

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

               (b) the Depositor, the Sellers, the Master Servicer and the
Trustee may deal with the Depository and the Depository Participants for all
purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of such Certificates;

               (c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;

               (d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make



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book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates
to such Depository Participants;

               (e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;

               (f) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and

               (g) to the extent the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.

               For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may
be given by Certificate Owners (acting through the Depository and the
Depository Participants) owning Book-Entry Certificates evidencing the
requisite percentage of principal amount of such Class of Certificates.

               Section 5.07 Notices to Depository.

               Whenever any notice or other communication is required to be
given to Certificateholders of the Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Trustee shall give all
such notices and communications to the Depository.

               Section 5.08 Definitive Certificates.

               If, after Book-Entry Certificates have been issued with respect
to any Certificates, (a) the Depositor advises the Trustee that the Depository
is no longer willing or able to discharge properly its responsibilities under
the Depository Agreement with respect to such Certificates and the Trustee or
the Depositor is unable to locate a qualified successor or (b) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights
evidenced by any Class of Book-Entry Certificates advise the Trustee and the
Depository in writing through the Depository Participants that the
continuation of a book-entry system with respect to Certificates of such Class
through the Depository (or its successor) is no longer in the best interests
of the Certificate Owners of such Class, then the Trustee shall notify all
Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners of such Class requesting the same. The
Depositor shall provide the Trustee with an adequate inventory of Certificates
to facilitate the issuance and transfer of Definitive Certificates. Upon
surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall authenticate and deliver such Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in
delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or
to be performed by the Depository shall be deemed to be imposed upon and
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applicable with respect to such Definitive Certificates and the Trustee shall
recognize the Holders of such Definitive Certificates as Certificateholders
hereunder.

               Section 5.09 Maintenance of Office or Agency.

               The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its offices at 101 Barclay Street, New York, New
York 10286, Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the
Certificateholders and the Class 1-AV-1 Insurer of any change in such location
of any such office or agency.

                                 ARTICLE VI.
              THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS

               Section 6.01 Respective Liabilities of the Depositor, the
                            Master Servicer and the Sellers.

               The Depositor, the Master Servicer and each Seller shall each
be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.

               Section 6.02 Merger or Consolidation of the Depositor, the
                            Master Servicer or the Sellers.

               The Depositor will keep in full effect its existence, rights
and franchises as a corporation under the laws of the United States or under
the laws of one of the states thereof and will each 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. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of
the United States or under the laws of one of the states thereof and will
obtain and preserve its qualification or registration to do business as a
foreign partnership in each jurisdiction in which such qualification or
registration 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 Depositor, the Master Servicer or
either Seller may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Master Servicer or either
Seller shall be a party, or any person succeeding to the business of the
Depositor, the Master Servicer or either Seller, shall be the successor of the
Depositor, the Master Servicer or such Seller, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided that the successor or surviving Person to the Master Servicer shall
be qualified to service mortgage loans on behalf of Fannie Mae and Freddie
Mac.



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               Section 6.03 Limitation on Liability of the Depositor, the
                            Sellers, the Master Servicer, the NIM Insurer
                            and Others.

               None of the Depositor, the Sellers, the NIM Insurer or the
Master Servicer or any of the directors, officers, employees or agents of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer shall be under
any liability to the Trustee (except as provided in Section 8.05), the Trust
Fund or the Certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors
in judgment; provided that this provision shall not protect the Depositor, the
Sellers, the Master Servicer or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Sellers, the Master Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Sellers, the NIM Insurer,
the Master Servicer and any director, officer, employee or agent of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The
Depositor, the Sellers, the NIM Insurer, the Master Servicer and any director,
officer, employee or agent of the Depositor, the Sellers, the NIM Insurer or
the Master Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor, the
Sellers, the NIM Insurer or the Master Servicer shall be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to
its respective duties hereunder and that in its opinion may involve it in any
expense or liability; provided that any of the Depositor, the Sellers, the NIM
Insurer or the Master Servicer may, in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be, expenses,
costs and liabilities of the Trust Fund, and the Depositor, the Sellers, the
NIM Insurer and the Master Servicer shall be entitled to be reimbursed
therefor out of the Certificate Account as provided by Section 3.08 hereof.

               Section 6.04 Limitation on Resignation of Master Servicer.

               The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) upon
appointment of a successor servicer that is reasonably acceptable to the
Trustee and the NIM Insurer and the written confirmation from each Rating
Agency (which confirmation shall be furnished to the Depositor, the Trustee
and the NIM Insurer) that such resignation will not cause such Rating Agency
to reduce the then-current rating of the Certificates (such determination to
be made without regard to the Class 1-AV-1 Policy). Any such determination
pursuant to clause (i) of the preceding sentence permitting the



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resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. No resignation of the Master Servicer
shall become effective until the Trustee shall have assumed the Master
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.

               Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.

               The Master Servicer shall, for so long as it acts as servicer
under this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations
as servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Fannie Mae and Freddie Mac
for persons performing servicing for mortgage loans purchased by Fannie Mae
and Freddie Mac. In the event that any such policy or bond ceases to be in
effect, the Master Servicer shall use its reasonable best efforts to obtain a
comparable replacement policy or bond from an insurer or issuer, meeting the
requirements set forth above as of the date of such replacement.

               The Master Servicer shall provide the Trustee, the Class 1-AV-1
Insurer and the NIM Insurer (upon such party's reasonable request) with copies
of any such insurance policies and fidelity bond. The Master Servicer shall be
deemed to have complied with this provision if an Affiliate of the Master
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer.

                                 ARTICLE VII.
                    DEFAULT; TERMINATION OF MASTER SERVICER

               Section 7.01 Events of Default.

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

                       (1) any failure by the Master Servicer to deposit in
        the Certificate Account or the Distribution Account or remit to the
        Trustee any payment (excluding a payment required to be made under
        Section 4.01 hereof) required to be made under the terms of this
        Agreement, which failure shall continue unremedied for five calendar
        days and, with respect to a payment required to be made under Section
        4.01(b) or (c) hereof, for one Business Day, after the date on which
        written notice of such failure shall have been given to the Master
        Servicer by the Trustee, the NIM Insurer or the Depositor, or to the
        Trustee, the NIM Insurer and the Master Servicer by the Holders of
        Certificates evidencing not less than 25% of the Voting Rights; or

                       (2) any failure by the Master Servicer to observe or
        perform in any material respect any other of the covenants or
        agreements on the part of the Master Servicer contained in this
        Agreement or any representation or warranty shall prove to be untrue,
        which failure or breach shall continue unremedied for a period of 60
        days after the date on which written notice of such failure shall have
        been given to the Master Servicer by the Trustee, the NIM Insurer or
        the Depositor, or to the Trustee by the



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        Holders of Certificates evidencing not less than 25% of the Voting
        Rights; provided that the sixty-day cure period shall not apply to the
        initial delivery of the Mortgage File for Delay Delivery Mortgage
        Loans nor the failure to repurchase or substitute in lieu thereof; or

                       (3) a decree or order of a court or agency or
        supervisory authority having jurisdiction in the premises for the
        appointment of a receiver or liquidator in any insolvency,
        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 Master Servicer and such decree or
        order shall have remained in force undischarged or unstayed for a
        period of 60 consecutive days; or

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

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

                       (6) the Master Servicer shall fail to reimburse in full
        the Trustee not later than 6:00 p.m. (New York time) on the Business
        Day following the related Distribution Date for any Advance made by
        the Trustee pursuant to Section 4.01(d) together with accrued and
        unpaid interest.

               If an Event of Default shall occur, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Trustee shall, but only at the direction of either the NIM Insurer or the
Holders of Certificates evidencing not less than 25% of the Voting Rights
(subject to the consent of the Class 1-AV-1 Insurer (which consent shall not
be unreasonably withheld)), by notice in writing to the Master Servicer (with
a copy to each Rating Agency), terminate all of the rights and obligations of
the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, other than its rights as a Certificateholder hereunder.
On or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer hereunder, whether with respect to
the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee.
The Trustee shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such
termination shall affect any obligation of the Master Servicer to pay amounts
owed pursuant to Article VIII. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder,


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including, without limitation, the transfer to the Trustee of all cash amounts
which shall at the time be credited to the Certificate Account, or thereafter
be received with respect to the Mortgage Loans. The Trustee shall promptly
notify the Rating Agencies of the occurrence of an Event of Default.

               Notwithstanding any termination of the activities of a Master
Servicer hereunder, such Master Servicer shall be entitled to receive, out of
any late collection of a Scheduled Payment on a Mortgage Loan that was due
prior to the notice terminating such Master Servicer's rights and obligations
as Master Servicer hereunder and received after such notice, that portion
thereof to which such Master Servicer would have been entitled pursuant to
Sections 3.08(a)(i) through (viii), and any other amounts payable to such
Master Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.

               Section 7.02 Trustee to Act; Appointment of Successor.

               On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer by the terms
and provisions hereof and applicable law including the obligation to make
advances pursuant to Section 4.01. As compensation therefor, the Trustee shall
be entitled to all fees, costs and expenses relating to the Mortgage Loans
that the Master Servicer would have been entitled to if the Master Servicer
had continued to act hereunder. Notwithstanding the foregoing, if the Trustee
has become the successor to the Master Servicer in accordance with Section
7.01 hereof, the Trustee may, if it shall be unwilling to so act, or shall, if
it is prohibited by applicable law from making Advances pursuant to Section
4.01 hereof or if it is otherwise unable to so act, (i) appoint any
established mortgage loan servicing institution reasonably acceptable to the
NIM Insurer (as evidenced by the prior written consent of the NIM Insurer), or
(ii) if it is unable for 60 days to appoint a successor servicer reasonably
acceptable to the NIM Insurer, petition a court of competent jurisdiction to
appoint any established mortgage loan servicing institution, the appointment
of which does not adversely affect the then-current rating of the Certificates
(without regard to the Class 1-AV-1 Policy, in the case of the Class 1-AV-1
Certificates) and the NIM Insurer guaranteed notes (without giving any effect
to any policy or guaranty provided by the NIM Insurer) by each Rating Agency
as the successor to the Master Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Master Servicer
hereunder. Any successor Master Servicer shall be an institution that is a
Fannie Mae and Freddie Mac approved seller/servicer in good standing, that has
a net worth of at least $15,000,000 and that is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer (other than liabilities and
indemnities of the Master Servicer under Section 6.03 hereof incurred prior to
termination of the Master Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; and provided further that each
Rating Agency acknowledges that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
reduced as a result of such assignment and delegation (without regard to the
Class 1-AV-1 Policy, in the case of the



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Class 1-AV-1 Certificates). No appointment of a successor to the Master
Servicer hereunder shall be effective until the Trustee shall have consented
thereto, and written notice of such proposed appointment shall have been
provided by the Trustee to each Certificateholder and the Class 1-AV-1
Insurer. The Trustee shall not resign as servicer until a successor servicer
has been appointed and has accepted such appointment. Pending appointment of a
successor to the Master Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.04 hereof, act
in such capacity as herein above provided. In connection with such appointment
and assumption, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided that no such compensation shall be in excess of that
permitted the Master Servicer hereunder. The Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor
servicer shall be deemed to be in default hereunder by reason of any failure
to make, or any delay in making, any distribution hereunder or any portion
thereof or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the Master
Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.

               Any successor to the Master Servicer as servicer shall give
notice to the NIM Insurer and the Mortgagors of such change of servicer and
shall, during the term of its service as servicer maintain in force the policy
or policies that the Master Servicer is required to maintain pursuant to
Section 6.05.

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

               Section 7.03 Notification to Certificateholders.

               (a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Class 1-AV-1 Insurer and to each Rating Agency.



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

                                ARTICLE VIII.
                  CONCERNING THE TRUSTEE AND THE CO-TRUSTEE

               Section 8.01 Duties of Trustee.

               The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.

               The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee (or the Co-Trustee, to the extent provided in this
Agreement) that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they
conform to the requirements of this Agreement, to the extent provided in this
Agreement. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner, the Trustee shall take action as it
deems appropriate to have the instrument corrected.

               No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure
to perform its obligations in compliance with this Agreement, or any liability
that would be imposed by reason of its willful misfeasance or bad faith;
provided that:

                       (1) prior to the occurrence of an Event of Default, and
        after the curing of all such Events of Default that may have occurred,
        the duties and obligations of the Trustee shall be determined solely
        by the express provisions of this Agreement, the Trustee shall not be
        liable, individually or as Trustee, except for the performance of such
        duties and obligations as are specifically set forth in this
        Agreement, no implied covenants or obligations shall be read into this
        Agreement against the Trustee and the Trustee may conclusively rely,
        as to the truth of the statements and the correctness of the opinions
        expressed therein, upon any certificates or opinions furnished to the
        Trustee and conforming to the requirements of this Agreement that it
        reasonably believed in good faith to be genuine and to have been duly
        executed by the proper authorities respecting any matters arising
        hereunder;

                       (2) the Trustee shall not be liable, individually or as
        Trustee, for an error of judgment made in good faith by a Responsible
        Officer or Responsible Officers of the Trustee, unless the Trustee was
        grossly negligent or acted in bad faith or with willful misfeasance;



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                       (3) the Trustee shall not be liable, individually or as
        Trustee, with respect to any action taken, suffered or omitted to be
        taken by it in good faith in accordance with the direction of the
        Holders of each Class of Certificates evidencing not less than 25% of
        the Voting Rights of such Class relating to the time, method and place
        of conducting any proceeding for any remedy available to the Trustee,
        or exercising any trust or power conferred upon the Trustee under this
        Agreement; and

                       (4) without in any way limiting the provisions of this
        Section 8.01 or Section 8.02 hereof, the Trustee shall be entitled to
        rely conclusively on the information delivered to it by the Master
        Servicer in a Trustee Advance Notice in determining whether or not it
        is required to make an Advance under Section 4.01(d), shall have no
        responsibility to ascertain or confirm any information contained in
        any Trustee Advance Notice, and shall have no obligation to make any
        Advance under Section 4.01(d) in the absence of a Trustee Advance
        Notice or actual knowledge by a Responsible Officer that (A) a
        required Advance was not made and (B) such required Advance was not a
        Nonrecoverable Advance.

               Section 8.02 Certain Matters Affecting the Trustee.

               (a) Except as otherwise provided in Section 8.01:

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

                       (2) the Trustee may consult with counsel and any
        Opinion of Counsel shall be full and complete authorization and
        protection in respect of any action taken or suffered or omitted by it
        hereunder in good faith and in accordance with such Opinion of
        Counsel;

                       (3) the Trustee shall not be liable, individually or as
        Trustee, for any action taken, suffered or omitted by it in good faith
        and believed by it to be authorized or within the discretion or rights
        or powers conferred upon it by this Agreement;

                       (4) prior to the occurrence of an Event of Default
        hereunder and after the curing of all Events of Default that may have
        occurred, the Trustee shall not be bound to make any investigation
        into the facts or matters stated in any resolution, certificate,
        statement, instrument, opinion, report, notice, request, consent,
        order, approval, bond or other paper or document, unless requested in
        writing so to do by the NIM Insurer or the Holders of each Class of
        Certificates evidencing not less than 25% of the Voting Rights of such
        Class; provided, however, that if the payment within a reasonable time
        to the Trustee of the costs, expenses or liabilities likely to be
        incurred by it in the making of such investigation is, in the opinion
        of the Trustee not reasonably assured to the Trustee by the NIM
        Insurer or such Certificateholders, the Trustee may require reasonable




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        indemnity against such expense, or liability from the NIM Insurer or
        such Certificateholders as a condition to taking any such action;

                       (5) the Trustee may execute any of the trusts or powers
        hereunder or perform any duties hereunder either directly or by or
        through agents, accountants or attorneys;

                       (6) the Trustee shall not be required to expend its own
        funds or otherwise incur any financial liability in the performance of
        any of its duties hereunder if it shall have reasonable grounds for
        believing that repayment of such funds or adequate indemnity against
        such liability is not assured to it;

                       (7) the Trustee shall not be liable, individually or as
        Trustee, for any loss on any investment of funds pursuant to this
        Agreement (other than as issuer of the investment security);

                       (8) the Trustee shall not be deemed to have knowledge
        of an Event of Default until a Responsible Officer of the Trustee
        shall have received written notice thereof; and

                       (9) the Trustee shall be under no obligation to
        exercise any of the trusts or powers vested in it by this Agreement or
        to make any investigation of matters arising hereunder or to
        institute, conduct or defend any litigation hereunder or in relation
        hereto at the request, order or direction of the NIM Insurer or any of
        the Certificateholders, pursuant to the provisions of this Agreement,
        unless the NIM Insurer or such Certificateholders, as applicable,
        shall have offered to the Trustee reasonable security or indemnity
        against the costs, expenses and liabilities that may be incurred
        therein or thereby.

               (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof
at the trial or other proceeding relating thereto, and any such suit, action
or proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.

               Section 8.03 Trustee Not Liable for Mortgage Loans.

               The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the
Certificates. The Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Master
Servicer.



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               Section 8.04 Trustee May Own Certificates.

               The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if
it were not the Trustee.

               Section 8.05 Master Servicer to Pay Trustee's Fees and
                            Expenses.

               The Master Servicer covenants and agrees to pay or reimburse
the Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must
engage persons not regularly in its employ to perform acts or services on
behalf of the Trust Fund, which acts or services are not in the ordinary
course of the duties of a trustee, paying agent or certificate registrar, in
the absence of a breach or default by any party hereto, the reasonable
compensation, expenses and disbursements of such persons, except any such
expense, disbursement or advance as may arise from its negligence, bad faith
or willful misconduct). The Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Master Servicer and held
harmless against any loss, liability or expense (i) incurred in connection
with any legal action relating to this Agreement or the Certificates, or in
connection with the performance of any of the Trustee's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or by reason of reckless disregard of the Trustee's
obligations and duties hereunder or (ii) resulting from any error in any tax
or information return prepared by the Master Servicer. Such indemnity shall
survive the termination of this Agreement or the resignation or removal of the
Trustee hereunder.

               Section 8.06 Eligibility Requirements for Trustee.

               The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates (without regard to the Class
1-AV-1 Policy, in the case of the Class 1-AV-1 Certificates) below the ratings
issued on the Closing Date (or having provided such security from time to time
as is sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation
or national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Sellers and the Master Servicer
and their respective affiliates; provided that such corporation cannot be an




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affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.

               Section 8.07 Resignation and Removal of Trustee.

               The Trustee may at any time resign and be discharged from the
trusts hereby created by (1) giving written notice of resignation to the
Depositor and the Master Servicer and by mailing notice of resignation by
first class mail, postage prepaid, to the Certificateholders at their
addresses appearing on the Certificate Register, the Class 1-AV-1 Insurer and
each Rating Agency, not less than 60 days before the date specified in such
notice when, subject to Section 8.08, such resignation is to take effect, and
(2) acceptance of appointment by a successor trustee in accordance with
Section 8.08 and meeting the qualifications set forth in Section 8.06. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice or resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment
of a successor trustee.

               If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the NIM Insurer or the Depositor, (ii) the
Trustee shall become incapable of acting, or shall be adjudged as bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or (iii)(A) a tax is imposed with respect to the Trust Fund by
any state in which the Trustee or the Trust Fund is located, (B) the
imposition of such tax would be avoided by the appointment of a different
trustee and (C) the Trustee fails to indemnify the Trust Fund against such
tax, then the Depositor, the NIM Insurer or the Master Servicer may remove the
Trustee and appoint a successor trustee, reasonably acceptable to the NIM
Insurer, by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Trustee, one copy of which shall be delivered to the
Master Servicer and one copy of which shall be delivered to the successor
trustee.

               The Holders evidencing at least 51% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set
of which instruments shall be delivered by the successor Trustee to the Master
Servicer one complete set to the Trustee so removed and one complete set to
the successor so appointed. Notice of any removal of the Trustee shall be
given to each Rating Agency by the successor Trustee.

               Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.

               Section 8.08 Successor Trustee.

               Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor, its
predecessor trustee and the Master Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of



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the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with the like effect as if originally named as trustee herein.

               No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof, is reasonably
acceptable to the NIM Insurer and its appointment shall not adversely affect
the then-current ratings of the Certificates (without regard to the Class
1-AV-1 Policy, in the case of the Class 1-AV-1 Certificates).

               Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the
succession of such trustee hereunder to the NIM Insurer and all Holders of
Certificates. If the Depositor fails to mail such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.

               Section 8.09 Merger or Consolidation of Trustee.

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

               Section 8.10 Appointment of Co-Trustee or Separate Trustee.

               Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Master Servicer and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee and reasonably acceptable to the NIM
Insurer to act as co-trustee or co-trustees jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund,
and to vest in such Person or Persons, in such capacity and for the benefit of
the Certificateholders, such title to the Trust Fund or any part thereof,
whichever is applicable, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.



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

                       (1) All rights, powers, duties and obligations
        conferred or imposed upon the Trustee, except for the obligation of
        the Trustee under this Agreement to advance funds on behalf of the
        Master Servicer, shall be conferred or imposed upon and exercised or
        performed by the Trustee and such separate trustee or co-trustee
        jointly (it being understood that such separate trustee or co-trustee
        is not authorized to act separately without the Trustee joining in
        such act), except to the extent that under any law of any jurisdiction
        in which any particular act or acts are to be performed (whether as
        Trustee hereunder or as successor to the Master Servicer hereunder),
        the Trustee shall be incompetent or unqualified to perform such act or
        acts, in which event such rights, powers, duties and obligations
        (including the holding of title to the Trust Fund or any portion
        thereof in any such jurisdiction) shall be exercised and performed
        singly by such separate trustee or co-trustee, but solely at the
        direction of the Trustee;

                       (2) No trustee hereunder shall be held personally
        liable by reason of any act or omission of any other trustee
        hereunder; and

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

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

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

               Section 8.11 Tax Matters.

               It is intended that the Trust Fund shall constitute, and that
the affairs of the Trust Fund shall be conducted so that each REMIC created
pursuant to the Preliminary Statement qualifies as, a "real estate mortgage
investment conduit" as defined in and in accordance with the REMIC Provisions.
In furtherance of such intention, the Trustee covenants and agrees that it
shall act as agent (and the Trustee is hereby appointed to act as agent) on
behalf of the Trust



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Fund and that in such capacity it shall: (a) prepare and file, or cause to be
prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment
Conduit Income Tax Returns (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect to each REMIC created hereunder containing such information and at the
times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and
in such manner as may be required thereby; (b) within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code for the
Trust Fund; (c) make or cause to be made elections, on behalf of each REMIC
created hereunder to be treated as a REMIC on the federal tax return of each
such REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when
required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) provide information necessary for the
computation of tax imposed on the transfer of a Class A-R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be
charged to the Person liable for such tax); (f) to the extent that they are
under its control conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC
created hereunder as a REMIC under the REMIC Provisions; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any REMIC created hereunder; (h) pay, from
the sources specified in the penultimate paragraph of this Section 8.11, the
amount of any federal, state and local taxes, including prohibited transaction
taxes as described below, imposed on any REMIC created hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); (i) sign or cause to be signed
federal, state or local income tax or information returns; (j) maintain
records relating to each REMIC created hereunder, including but not limited to
the income, expenses, assets and liabilities of each such REMIC, and the fair
market value and adjusted basis of the Trust Fund property determined at such
intervals as may be required by the Code, as may be necessary to prepare the
foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent the Trust Fund in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year
of any REMIC created hereunder, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations



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relating to any tax item of the Trust Fund, and otherwise act on behalf of any
REMIC created hereunder in relation to any tax matter involving any such
REMIC.

               In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten days after the Closing Date all information or data that
the Trustee requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of the Certificates and the Mortgage Loans (and, to the extent not part of the
aforementioned, the information referred to in paragraphs (1), (2), (3) and
(4) of Section 4.05(d)). Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order
to enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause
to be provided, accurate information or data to the Trustee on a timely basis.

               In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund as defined in section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of the Trust Fund as defined in
section 860G(c) of the Code, on any contribution to the Trust Fund after the
startup day pursuant to section 860G(d) of the Code, or any other tax is
imposed, including, without limitation, any federal, state or local tax or
minimum tax imposed upon the Trust Fund pursuant to sections 23153 and 24872
of the California Revenue and Taxation Code if not paid as otherwise provided
for herein, such tax shall be paid by (i) the Trustee, if any such other tax
arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) (x) the Master Servicer, in the case of
any such minimum tax, and (y) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or (iii) in all other
cases, or in the event that any liable party here fails to honor its
obligations under the preceding clauses (i) or (ii), any such tax will be paid
first with amounts otherwise to be distributed to the Class A-R
Certificateholders, and second with amounts otherwise to be distributed to all
other Certificateholders in the same manner as if such tax were a Realized
Loss that occurred ratably within each Loan Group. Notwithstanding anything to
the contrary contained herein, to the extent that such tax is payable by the
Class A-R Certificates, the Trustee is hereby authorized to retain on any
Distribution Date, from the Holders of the Class A-R Certificates (and, if
necessary, second, from the Holders of the all other Certificates in the
priority specified in the preceding sentence), funds otherwise distributable
to such Holders in an amount sufficient to pay such tax. The Trustee agrees to
promptly notify in writing the party liable for any such tax of the amount
thereof and the due date for the payment thereof.

               The Trustee shall treat the Carryover Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h)
that is owned by the Holders of the Class C Certificates, and that is not an
asset of any REMIC created hereunder. The Trustee shall treat the rights of
the Holders of each Class of Certificates (other than the Class P and Class
A-R Certificates) to receive payments from the Carryover Reserve Fund as
rights in an interest rate corridor contract written by: (i) the Corridor
Contract Counterparty in respect of any Net Rate Carryover funded by any
Corridor Contract and in respect of any residual payments from such



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Corridor Contract received by the Class CF and Class CV Certificates, as the
case may be, and (ii) the Holders of the Class CF and Class CV Certificates in
respect of (a) any monies distributed pursuant to Sections 4.04(e)(18) and
4.04(f)(20) herein, in favor of the other Certificateholders. Thus, the Class
AF-1, Class 1-AV-1 and Class 2-AV Certificates and the Adjustable Rate
Subordinate Certificates, shall be treated as representing ownership of not
only an Master REMIC regular interest, but also ownership of an interest in an
interest rate corridor contract. For purposes of determining the issue price
of the Master REMIC regular interests, the Trustee shall assume that the Class
AF-1 Corridor Contract, the Class 1-AV-1 Corridor Contract, the Class 2-AV
Corridor Contract and Adjustable Rate Subordinate Corridor Contract have
values of $3,000, $777,000, $232,000 and $588,000, respectively. The Trustee
shall treat entitlement to Credit Comeback Excess Amounts as owned by the
Holders of the Class CF Certificates and not as an asset of, or interest in,
any REMIC created hereunder. Further, the Trustee shall treat any payments of
Credit Comeback Excess Amounts to Persons other than the Holders of the Class
CF Certificates as payments made by the Holders of the Class CF Certificates
pursuant to a credit enhancement contract under Treasury Regulation
1.860G-2(c). The Trustee shall also treat any amount payable to a Class CF
Certificate with respect to an R-3-X Interest as deposited into the Carryover
Reserve Fund.

               Section 8.12 Co-Trustee.

               (a) The Co-Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Co-Trustee that are specifically required to be
furnished pursuant to any provision of this Agreement shall examine them to
determine whether they conform to the requirements of this Agreement, to the
extent required by this Agreement. If any such instrument is found not to
conform to the requirements of this Agreement in a material manner, the
Co-Trustee shall take action as it deems appropriate to have the instrument
corrected.

               (b) No provision of this Agreement shall be construed to
relieve the Co-Trustee from liability for its own grossly negligent action,
its own gross negligent failure to act or its own misconduct, its grossly
negligent failure to perform its obligations in compliance with this
Agreement, or any liability that would be imposed by reason of its willful
misfeasance or bad faith; provided that:

                       (1) the duties and obligations of the Co-Trustee shall
        be determined solely by the express provisions of this Agreement with
        the exception of Section 8.10, the Co-Trustee shall not be liable,
        individually or as Co-Trustee, except for the performance of such
        duties and obligations as are specifically set forth in this
        Agreement, no implied covenants or obligations shall be read into this
        Agreement against the Co-Trustee and the Co-Trustee may conclusively
        rely, as to the truth of the statements and the correctness of the
        opinions expressed therein, upon any certificates or opinions
        furnished to the Co-Trustee and conforming to the requirements of this
        Agreement that it reasonably believed in good faith to be genuine and
        to have been duly executed by the proper authorities respecting any
        matters arising hereunder; and

                       (2) the Co-Trustee shall not be liable, individually or
        as Co-Trustee, for an error of judgment made in good faith by a
        Responsible Officer or Responsible



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        Officers of the Trustee, unless the Co-Trustee was grossly negligent
        or acted in bad faith or with willful misfeasance.

               (c) Except as otherwise provided in paragraph (b) above:

                       (1) the Co-Trustee may request and rely upon and shall
        be protected in acting or refraining from acting upon any resolution,
        Officer's Certificate, certificate of auditors or any other
        certificate, statement, instrument, opinion, report, notice, request,
        consent, order, appraisal, bond or other paper or document believed by
        it to be genuine and to have been signed or presented by the proper
        party or parties;

                       (2) the Co-Trustee may consult with counsel and any
        Opinion of Counsel shall be full and complete authorization and
        protection in respect of any action taken or suffered or omitted by it
        hereunder in good faith and in accordance with such Opinion of
        Counsel;

                       (3) the Co-Trustee shall not be liable, individually or
        as Co-Trustee, for any action taken, suffered or omitted by it in good
        faith and believed by it to be authorized or within the discretion or
        rights or powers conferred upon it by this Agreement;

                       (4) the Co-Trustee shall not be bound to make any
        investigation into the facts or matters stated in any resolution,
        certificate, statement, instrument, opinion, report, notice, request,
        consent, order, approval, bond or other paper or document;

                       (5) the Co-Trustee may execute any of the trusts or
        powers hereunder or perform any duties hereunder either directly or by
        or through agents, accountants or attorneys; and

                       (6) the Co-Trustee shall not be required to expend its
        own funds or otherwise incur any financial liability in the
        performance of any of its duties hereunder if it shall have reasonable
        grounds for believing that repayment of such funds or adequate
        indemnity against such liability is not assured to it.

               (d) The recitals contained herein shall be taken as the
statements of the Depositor or the Master Servicer, as the case may be, and
the Co-Trustee assumes no responsibility for their correctness. The Co-Trustee
makes no representations as to the validity or sufficiency of this Agreement
or of any Mortgage Loan or related document or of MERS or the MERS(R) System.
The Co-Trustee shall not be accountable for the use or application by the
Depositor or the Master Servicer of any funds paid to the Depositor or the
Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Certificate Account by the Depositor or the Master Servicer.

               (e) The Co-Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates with the same rights as it would
have if it were not the Co-Trustee.



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               (f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered
by it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and
(ii) to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or services
are not in the ordinary course of the duties of a trustee, paying agent or
certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such
persons, except any such expense, disbursement or advance as may arise from
its negligence, bad faith or willful misconduct). The Co-Trustee and any
director, officer, employee or agent of the Co-Trustee shall be indemnified by
the Master Servicer and held harmless against any loss, liability or expense
(i) incurred in connection with any legal action relating to this Agreement or
the Certificates, or in connection with the performance of any of the
Co-Trustee's duties hereunder, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of any of the Co-Trustee's duties hereunder or by reason of
reckless disregard of the Co-Trustee's obligations and duties hereunder and
(ii) resulting from any error in any tax or information return prepared by the
Master Servicer. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Co-Trustee hereunder.

               (g) The Co-Trustee hereunder shall, at all times, be a
corporation or association organized and doing business under the laws of a
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating that would not cause any of the Rating
Agencies to reduce their respective ratings of any Class of Certificates
(without regard to the Class 1-AV-1 Policy, in the case of the Class 1-AV-1
Certificates) below the ratings issued on the Closing Date (or having provided
such security from time to time as is sufficient to avoid such reduction). If
such corporation or association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section 8.12 the
combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Co-Trustee shall
cease to be eligible in accordance with the provisions of this Section 8.12,
the Co-Trustee shall resign immediately in the manner and with the effect
specified in paragraph (h) below. The corporation or national banking
association serving as Co-Trustee may have normal banking and trust
relationships with the Depositor, the Sellers and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.



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               (h) The Co-Trustee may at any time resign and be discharged
from the trusts hereby created by giving 30 days prior written notice of
resignation to the Trustee, the Depositor and the Master Servicer. Upon such
resignation the Trustee (x) may appoint a successor Co-Trustee meeting the
requirements in paragraph (g) above and acceptable to the Master Servicer and
the NIM Insurer (in their sole discretion), so long as such Co-Trustee
executes and delivers to the other parties hereto an instrument agreeing to be
bound by the provisions of this Agreement or (y) may if permitted by the
Master Servicer (in its sole discretion) assume the rights and duties of the
resigning Co-Trustee so long as the Trustee executes and delivers an
instrument to that effect.

               Section 8.13 Access to Records of the Trustee.

               The Trustee and any Co-Trustee shall afford the Sellers, the
Depositor, the Master Servicer, the NIM Insurer, the Class 1-AV-1 Insurer and
each Certificate Owner upon reasonable notice during normal business hours
access to all records maintained by the Trustee or Co-Trustee in respect of
its duties under this Agreement and access to officers of the Trustee
responsible for performing its duties. Upon request, the Trustee or Co-Trustee
shall furnish the Depositor, the Master Servicer, the NIM Insurer, the Class
1-AV-1 Insurer and any requesting Certificate Owner with its most recent
financial statements. The Trustee shall cooperate fully with the Sellers, the
Master Servicer, the Depositor, the NIM Insurer, the Class 1-AV-1 Insurer and
the Certificate Owner for review and copying any books, documents, or records
requested with respect to the Trustee's and Co-Trustee's respective duties
under this Agreement. The Sellers, the Depositor, the Master Servicer, the
Class 1-AV-1 Insurer and the Certificate Owner shall not have any
responsibility or liability for any action for failure to act by the Trustee
or Co-Trustee and are not obligated to supervise the performance of the
Trustee under this Agreement or otherwise.

               Section 8.14 Suits for Enforcement.

               If an Event of Default or other material default by the Master
Servicer or the Depositor under this Agreement occurs and is continuing, at
the direction of the Certificateholders holding not less than 51% of the
Voting Rights or the NIM Insurer, the Trustee shall proceed to protect and
enforce its rights and the rights of the Certificateholders or the NIM Insurer
under this Agreement by a suit, action, or proceeding in equity or at law or
otherwise, whether for the specific performance of any covenant or agreement
contained in this Agreement or in aid of the execution of any power granted in
this Agreement or for the enforcement of any other legal, equitable, or other
remedy, as the Trustee, being advised by counsel, and subject to the
foregoing, shall deem most effectual to protect and enforce any of the rights
of the Trustee, the NIM Insurer and the Certificateholders.



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                                  ARTICLE IX.

                                  TERMINATION

               Section 9.01 Termination upon Liquidation or Repurchase of all
                            Mortgage Loans.

               Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Sellers, the Trustee and the Co-Trustee created hereby shall terminate upon
the earlier of (a) the purchase by the Master Servicer or NIM Insurer (the
party exercising such purchase option, the "Terminator") of all of the
Mortgage Loans (and REO Properties) remaining in the Trust Fund at the price
equal to the sum of (i) 100% of the Stated Principal Balance of each Mortgage
Loan in the Trust Fund (other than in respect of an REO Property), (ii)
accrued interest thereon at the applicable Mortgage Rate (or, if such
repurchase is effected by the Master Servicer, at the applicable Net Mortgage
Rate, (iii) the appraised value of any REO Property in the Trust Fund (up to
the Stated Principal Balance of the related Mortgage Loan), such appraisal to
be conducted by an appraiser mutually agreed upon by the Terminator and the
Trustee and (iv) plus, if the Terminator is the NIM Insurer, any unreimbursed
Servicing Advances, and the principal portion of any unreimbursed Advances,
made on the Mortgage Loans prior to the exercise of such repurchase and (b)
the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to related
Certificateholders of all amounts required to be distributed to them pursuant
to this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James's, living on the
date hereof and (ii) the Latest Possible Maturity Date.

               The right to purchase all Mortgage Loans and REO Properties by
the Terminator pursuant to clause (a) of the immediately preceding paragraph
shall be conditioned upon (1) the Stated Principal Balance of the Mortgage
Loans, at the time of any such repurchase, aggregating ten percent (10%) or
less of the Cut-off Date Principal Balance of the Mortgage Loans, (2) unless
the NIM Insurer otherwise consents, the purchase price for such Mortgage Loans
and REO Properties shall result in a final distribution on any NIM Insurer
guaranteed notes that is sufficient (x) to pay such notes in full and (y) to
pay any amounts due and payable to the NIM Insurer pursuant to the indenture
related to such notes and (3) unless the Class 1-AV-1 Insurer otherwise
consents, the purchase price for such Mortgage Loans and REO Properties shall
result in a final distribution on the Class 1-AV-1 Certificates and to the
Class 1-AV-1 Insurer that is sufficient (x) to pay such Class 1-AV-1
Certificates in full and (y) to pay any amounts due and payable to the Class
1-AV-1 Insurer pursuant to the terms hereof.

               The NIM Insurer's right to purchase all Mortgage Loans and REO
Properties shall be further conditioned upon the written consent of the Master
Servicer.

               Section 9.02 Final Distribution on the Certificates.

               If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Trust Fund other than the funds



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in the Certificate Account related to such Loan Group, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
related Certificateholder and the Class 1-AV-1 Insurer or (ii) the Trustee
determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Trustee shall notify the related
Certificateholders and the Class 1-AV-1 Insurer within five (5) Business Days
after such Determination Date that the final distribution in retirement of
such Class of Certificates is scheduled to be made on the immediately
following Distribution Date. Any final distribution made pursuant to the
immediately preceding sentence will be made only upon presentation and
surrender of the related Certificates at the Corporate Trust Office of the
Trustee. If the Terminator elects to terminate pursuant to clause (a) of
Section 9.01, at least 20 days prior to the date notice is to be mailed to the
affected Certificateholders, such electing party shall notify the Depositor,
the Class 1-AV-1 Insurer and the Trustee of the date such electing party
intends to terminate and of the applicable repurchase price of the related
Mortgage Loans and REO Properties.

               Notice of any termination, specifying the Distribution Date on
which related Certificateholders may surrender their Certificates for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to related Certificateholders mailed not earlier than the
10th day and no later than the 15th day of the month immediately preceding the
month of such final distribution. Any such notice shall specify (a) the
Distribution Date upon which final distribution on related Certificates will
be made upon presentation and surrender of such Certificates at the office
therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made, and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of such Certificates at the office therein
specified. The Terminator will give such notice to each Rating Agency at the
time such notice is given to the affected Certificateholders.

               In the event such notice is given, the Master Servicer shall
cause all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit and the receipt by the
Trustee of a Request for Release therefor, the Co-Trustee shall promptly
release to the Master Servicer the Mortgage Files for the Mortgage Loans.

               Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders of each affected
Class and the Class 1-AV-1 Insurer the amounts allocable to such Certificates
and the Class 1-AV-1 Insurer held in the Distribution Account (and, if
applicable, the Carryover Reserve Fund) in the order and priority set forth in
Section 4.04 hereof on the final Distribution Date and in proportion to their
respective Percentage Interests. Notwithstanding the reduction of the
Certificate Principal Balance of any Class of Certificates to zero, such Class
will be outstanding hereunder (solely for the purpose of receiving
distributions (if any) to which it may be entitled pursuant to the terms of
this Agreement and not for any other purpose) until the termination of the
respective obligations and responsibilities of the Depositor, each Seller, the
Master Servicer and the Trustee hereunder in accordance with Article IX.



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               In the event that any affected Certificateholders shall not
surrender related Certificates for cancellation within six months after the
date specified in the above mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
related Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one
year after the second notice all related Certificates shall not have been
surrendered for cancellation, the Class 1-AV-1 Insurer, with respect to the
Class 1-AV-1 Reimbursement Amount and then the Class A-R Certificates shall be
entitled to all unclaimed funds and other assets that remain subject hereto.

               Section 9.03 Additional Termination Requirements.

               (a) In the event the Terminator exercises its purchase option,
the Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel,
at the expense of the Terminator, to the effect that the failure of the Trust
Fund to comply with the requirements of this Section 9.03 will not (i) result
in the imposition of taxes on "prohibited transactions" of a REMIC, or (ii)
cause any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificates are outstanding:

                       (1) The Master Servicer shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the Trust Fund's final
Tax Return pursuant to Treasury Regulation Section 1.860F-1. The Master
Servicer shall prepare a plan of complete liquidation and shall otherwise
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of Counsel
delivered to the Trustee and the Depositor obtained at the expense of the
Terminator;

                       (2) During such 90-day liquidation period, and at or
prior to the time of making the final payment on the Certificates, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust
Fund to the Terminator for cash; and

                       (3) At the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R Certificateholders all cash on hand
(other than cash retained to meet claims) related to such Class of
Certificates, and the Trust Fund shall terminate at that time.

               (b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Master Servicer to specify the 90-day liquidation
period for the Trust Fund, which authorization shall be binding upon all
successor Certificateholders. The Trustee shall attach a statement to the
final federal income tax return for each of any REMIC created hereunder
stating that pursuant to Treasury Regulation Section 1.860F-1, the first day
of the 90-day liquidation period for each the REMIC was the date on which the
Trustee sold the assets of the Trust Fund to the Terminator.



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               (c) The Trustee as agent for each REMIC created hereunder
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Master Servicer, and the receipt of the Opinion of
Counsel referred to in Section 9.03(a)(1), and together with the Holders of
the Class A-R Certificates agree to take such other action in connection
therewith as may be reasonably requested by the Terminator.

                                  ARTICLE X.

                           MISCELLANEOUS PROVISIONS

               Section 10.01 Amendment.

               This Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Sellers, the Co-Trustee and the Trustee
with the consent of the NIM Insurer, without the consent of any of the
Certificateholders (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein, (iii) to conform this Agreement to the Prospectus
Supplement or the Prospectus, (iv) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement to comply with any
rules or regulations promulgated by the Securities and Exchange Commission
from time to time, or (v) to make such other provisions with respect to
matters or questions arising under this Agreement, as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Certificateholder; provided that any such amendment shall
be deemed not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal
of the respective ratings then assigned to the Certificates (without regard to
the Class 1-AV-1 Policy, in the case of the Class 1-AV-1 Certificates), it
being understood and agreed that any such letter in and of itself will not
represent a determination as to the materiality of any such amendment and will
represent a determination only as to the credit issues affecting any such
rating. Any amendment described above made solely to conform this Agreement to
the Prospectus Supplement shall be deemed not to adversely affect in any
material respect the interests of the Certificateholders. Notwithstanding the
foregoing, no amendment that significantly changes the permitted activities of
the trust created by this Agreement may be made without the consent of
Certificateholders representing not less than 51% of the Voting Rights of each
Class of Certificates affected by such amendment. Each party to this Agreement
hereby agrees that it will cooperate with each other party in amending this
Agreement pursuant to clause (iv) above.

               The Trustee, the Co-Trustee, the Depositor, the Master Servicer
and the Sellers with the consent of the NIM Insurer may also at any time and
from time to time amend this Agreement, without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of the Trust Fund as a REMIC under the Code or to avoid or minimize the risk
of the imposition of any tax on the Trust Fund pursuant to the Code that would
be a claim against the Trust Fund at any time prior to the final redemption of
the Certificates, provided that the Trustee have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such
opinion but in any case shall not be an expense of the Trustee, to the effect
that such action is



                                     168
<PAGE>

necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.

               This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Sellers, the Co-Trustee and the Trustee
with the consent of the NIM Insurer and the Holders of each Class of
Certificates affected thereby evidencing not less than 51% of the Voting
Rights of such Class for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided
that no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, payments required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in
a manner other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing 66% or more of the Voting Rights of such
Class, (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment without the consent of the
Holders of all such Certificates then outstanding or (iv) adversely affect in
any material respect the rights and interest of the Class 1-AV-1 Insurer under
this Agreement without its consent, which consent shall not be unreasonably
withheld.

               Notwithstanding any contrary provision of this Agreement, the
Trustee and the NIM Insurer shall not consent to any amendment to this
Agreement unless each shall have first received an Opinion of Counsel
satisfactory to the Trustee and the NIM Insurer, which opinion shall be an
expense of the party requesting such amendment but in any case shall not be an
expense of the Trustee or the NIM Insurer, to the effect that such amendment
will not cause the imposition of any tax on the Trust Fund or the
Certificateholders or cause any REMIC formed hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding.

               Promptly after the execution of any amendment to this
Agreement, the Trustee shall furnish written notification of the substance of
such amendment to the Class 1-AV-1 Insurer and, if the amendment required the
consent of Certificateholders, to each Certificateholder and each Rating
Agency.

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

               Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel, reasonably
satisfactory to the Trustee and the NIM Insurer that (i) such amendment is
permitted and is not prohibited by this Agreement and that all requirements
for amending this Agreement have been complied with; and (ii) either (A) the
amendment does not adversely affect in any material respect the interests of
any Certificateholder or (B) the conclusion set forth in the immediately
preceding clause (A) is not required to be reached pursuant to this Section
10.01.



                                     169
<PAGE>

               Section 10.02 Recordation of Agreement; Counterparts.

               This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the properties subject to the
Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Master Servicer at its
expense.

               For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

               Section 10.03 Governing Law.

               THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

               Section 10.04 Intention of Parties.

               It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute
sale thereof to the Trustee. It is, further, not the intention of the parties
that such conveyance be deemed a pledge thereof by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, or if for
any other reason this Agreement is held or deemed to create a security
interest in such assets, then (i) this Agreement shall be deemed to be a
security agreement (within the meaning of the Uniform Commercial Code of the
State of New York) with respect to all such assets and security interests and
(ii) the conveyance provided for in this Agreement shall be deemed to be an
assignment and a grant pursuant to the terms of this Agreement by the
Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.

               The Depositor for the benefit of the Certificateholders and the
NIM Insurer shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the assets of the Trust Fund, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Agreement. The Depositor shall arrange for filing any Uniform Commercial Code
continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.



                                     170
<PAGE>

               Section 10.05 Notices.

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

                       (1) Any material change or amendment to this Agreement;

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

                       (3) The resignation or termination of the Master
        Servicer or the Trustee and the appointment of any successor;

                       (4) The repurchase or substitution of Mortgage Loans
        pursuant to Sections 2.02, 2.03, 2.04 and 3.12; and

                       (5) The final payment to Certificateholders.

               (b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies of the following:

                       (1) Each report to Certificateholders described in
        Section 4.05;

                       (2) Each annual statement as to compliance described in
        Section 3.17; and

                       (3) Each annual independent public accountants'
        servicing report described in Section 3.18.

               (c) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the
Depositor, CWABS, Inc., 4500 Park Granada, Calabasas, California 91302,
facsimile number: (818) 225-4053, Attention: David A. Spector, or such other
address as may be hereafter furnished to the Sellers, the Master Servicer and
the Trustee by the Depositor in writing; (ii) in the case of CHL, Countrywide
Home Loans, Inc., 4500 Park Granada, Calabasas, California 91302, facsimile
number (818) 225-4053, Attention: David A. Spector, or such other address as
may be hereafter furnished to the Depositor, the Master Servicer and the
Trustee by the Sellers in writing; (iii) in the case of the Liquidity Trust,
Countrywide LFT LLC, 4500 Park Granada, Calabasas, California 91302, facsimile
number (818) 225-4028, Attention: Paul Liu, or such other address as may be
hereafter furnished to the Depositor, the Master Servicer and the Trustee by
the Sellers in writing; (iv) in the case of the Master Servicer, Countrywide
Home Loans Servicing LP, 7105 Corporate Drive, Plano, Texas 75024, facsimile
number (805) 520-5623, Attention: Mark Wong or such other address as may be
hereafter furnished to the Depositor, the Sellers and the Trustee by the
Master Servicer in writing; (v) in the case of the Trustee, The Bank of New
York, 101 Barclay Street, New York, New York 10286, Attention: Corporate Trust
MBS Administration, CWABS, Series 2004-12, or such other address as the
Trustee may hereafter furnish to the Depositor or the Master Servicer; (vi) in
the case of the Co-Trustee, The Bank of New York Trust Company, N.A., 700 S.
Flower Street, Suite 200, Los Angeles, California, 90017, Attention: MBS
Support Services, or such



                                     171
<PAGE>

other address as the Co-Trustee may be hereafter furnished to the Depositor,
the Master Servicer and the Trustee; (vii) in the case of the Class 1-AV-1
Insurer, MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504,
Attention: Insured Portfolio Management - Structured Finance (IPM-SF) (CWABS
2004-12) or such other address as may be hereafter furnished by the Class
1-AV-1 Insurer and (viii) in the case of the Rating Agencies, (x) Moody's
Investors Service, Inc., Attention: ABS Monitoring Department, 99 Church
Street, Sixth Floor, New York, New York 10007, (y) Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Attention: Mortgage
Surveillance Group, 55 Water Street, 41st Floor, New York, New York 10041 and
(z) Dominion Bond Rating Service, Inc., Attention: Residential Mortgage-Backed
Securities, 55 Broadway, 15th Floor, New York, New York 10006. Notices to
Certificateholders shall be deemed given when mailed, first postage prepaid,
to their respective addresses appearing in the Certificate Register.

               Section 10.06 Severability of Provisions.

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

               Section 10.07 Assignment.

               Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 6.02, this Agreement may not be
assigned by the Master Servicer without the prior written consent of the
Trustee and the Depositor.

               Section 10.08 Limitation on Rights of Certificateholders.

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

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

               No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than
25% of the Voting Rights shall



                                     172
<PAGE>

also have made written request to the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to
the Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.08, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.

               Section 10.09 Inspection and Audit Rights.

               The Master Servicer agrees that, on reasonable prior notice, it
will permit any representative of the Depositor, either Seller, the NIM
Insurer or the Trustee during the Master Servicer's normal business hours, to
examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor, a Seller, the NIM Insurer or the
Trustee and to discuss its affairs, finances and accounts relating to the
Mortgage Loans with its officers, employees and independent public accountants
(and by this provision the Master Servicer hereby authorizes such accountants
to discuss with such representative such affairs, finances and accounts), all
at such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor, either
Seller, the NIM Insurer or the Trustee of any right under this Section 10.09
shall be borne by the party requesting such inspection; all other such
expenses shall be borne by the Master Servicer.

               Section 10.10 Certificates Nonassessable and Fully Paid.

               It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and
shall be deemed fully paid.

               Section 10.11 Rights of NIM Insurer.

               (a) The rights of the NIM Insurer under this Agreement shall
exist only so long as either:

                       (1) the notes certain payments on which are guaranteed
        by the NIM Insurer remain outstanding or



                                     173
<PAGE>

                       (2) the NIM Insurer is owed amounts paid by it with
        respect to that guaranty.

               (b) The rights of the NIM Insurer under this Agreement are
exercisable by the NIM Insurer only so long as no default by the NIM Insurer
under its guaranty of certain payments under notes backed or secured by the
Class C or Class P Certificates has occurred and is continuing. If the NIM
Insurer is the subject of any insolvency proceeding, the rights of the NIM
Insurer under this Agreement will be exercisable by the NIM Insurer only so
long as:

                       (1) the obligations of the NIM Insurer under its
        guaranty of notes backed or secured by the Class C or Class P
        Certificates have not been disavowed and

                       (2) CHL and the Trustee have received reasonable
        assurances that the NIM Insurer will be able to satisfy its
        obligations under its guaranty of notes or secured by the Class C or
        Class P Certificates.

               (c) The NIM Insurer is a third party beneficiary of this
Agreement to the same extent as if it were a party to this Agreement and may
enforce any of those rights under this Agreement.

               (d) A copy of any documents of any nature required by this
Agreement to be delivered by the Trustee, or to the Trustee or the Rating
Agencies, shall in each case at the same time also be delivered to the NIM
Insurer. Any notices required to be given by the Trustee, or to the Trustee or
the Rating Agencies, shall in each case at the same time also be given to the
NIM Insurer. If the Trustee receives a notice or document that is required
hereunder to be delivered to the NIM Insurer, and if such notice or document
does not indicate that a copy thereof has been previously sent to the NIM
Insurer, the Trustee shall send the NIM Insurer a copy of such notice or
document. If such document is an Opinion of Counsel, the NIM Insurer shall be
an addressee thereof or such Opinion of Counsel shall contain language
permitting the NIM Insurer to rely thereon as if the NIM Insurer were an
addressee thereof.

               (e) Anything in this Agreement that is conditioned on not
resulting in the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies shall also be conditioned on not resulting
in the downgrading or withdrawal of the ratings then assigned by the Rating
Agencies to the notes backed or secured by the Class C or Class P Certificates
(without giving effect to any policy or guaranty provided by the NIM Insurer.




                                     174
<PAGE>



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

                                          CWABS, INC.,
                                               as Depositor


                                          By:      /s/ Leon Daniels, Jr.
                                              --------------------------------
                                               Name:   Leon Daniels, Jr.
                                               Title:  Vice President


                                          COUNTRYWIDE HOME LOANS, INC.,
                                               as Seller


                                          By:      /s/ Leon Daniels, Jr.
                                              --------------------------------
                                               Name:   Leon Daniels, Jr.
                                               Title:  Senior Vice President


                                          COUNTRYWIDE LFT LLC,
                                               as Seller


                                          By:      /s/ Leon Daniels, Jr.
                                              --------------------------------
                                               Name:   Leon Daniels, Jr.
                                               Title:  Vice President


                                          COUNTRYWIDE HOME LOANS SERVICING LP,
                                               as Master Servicer


                                          By:  COUNTRYWIDE GP, INC.


                                          By:      /s/ Leon Daniels, Jr.
                                              --------------------------------
                                               Name:   Leon Daniels, Jr.
                                               Title:  Vice President




<PAGE>



                                          THE BANK OF NEW YORK,
                                          as Trustee


                                          By: /s/ AnnMarie Cassano
                                              --------------------------------
                                              Name:  AnnMarie Cassano
                                              Title:  Assistant Treasurer




                                          THE BANK OF NEW YORK TRUST
                                          COMPANY, N.A.,
                                          as Co-Trustee


                                          By: /s/ Stephanie A. Whited
                                              --------------------------------
                                                 Name:  Stephanie A. Whited
                                                 Title:  Vice President



                                          THE BANK OF NEW YORK
                                          (solely with respect to its
                                          obligations under Section 4.01(d))



                                          By: /s/ Paul Connolly
                                              --------------------------------
                                              Name:  Paul Connolly
                                              Title:  Vice President





<PAGE>






STATE OF CALIFORNIA           )
                              )   ss.:
COUNTY OF LOS ANGELES         )

               On this 29th day of November, 2004, before me, a notary public
in and for said State, appeared Leon Daniels, Jr., personally known to me on
the basis of satisfactory evidence to be a Senior Vice President of
Countrywide Home Loans, Inc., one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.

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


                                                      /s/ Glenda Daniel
                                                  -----------------------------
                                                         Notary Public


[Notarial Seal]




<PAGE>




STATE OF CALIFORNIA           )
                              )   ss.:
COUNTY OF LOS ANGELES         )

               On this 29th day of November, 2004, before me, a notary public
in and for said State, appeared Leon Daniels, Jr., personally known to me on
the basis of satisfactory evidence to be a Vice President of Countrywide GP,
Inc., the parent company of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such limited partnership and
acknowledged to me that such limited partnership executed the within
instrument.

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


                                                        /s/ Glenda Daniel
                                                  -----------------------------
                                                         Notary Public


[Notarial Seal]




<PAGE>




STATE OF CALIFORNIA           )
                              )   ss.:
COUNTY OF LOS ANGELES         )

               On this 29th day of November, 2004, before me, a notary public
in and for said State, appeared Leon Daniels, Jr., personally known to me on
the basis of satisfactory evidence to be a Vice President of CWABS, Inc., one
of the corporations that executed the within instrument, and also known to me
to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within instrument.

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


                                                        /s/ Glenda Daniel
                                                  -----------------------------
                                                         Notary Public


[Notarial Seal]



<PAGE>






STATE OF CALIFORNIA           )
                              )   ss.:
COUNTY OF LOS ANGELES         )

               On this 29th day of November, 2004, before me, a notary public
in and for said State, appeared Leon Daniels, Jr., personally known to me on
the basis of satisfactory evidence to be a Vice President of Countrywide LFT
LLC, one of the corporations that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within instrument.

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


                                                       /s/ Glenda Daniel
                                                  -----------------------------
                                                         Notary Public


[Notarial Seal]




<PAGE>



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

                      On this 29th day of November, 2004 before me, a notary
        public in and for said State, appeared AnnMarie Cassano, personally
        known to me on the basis of satisfactory evidence to be a Assistant
        Treasurer of The Bank of New York, a New York banking corporation that
        executed the within instrument, and also known to me to be the person
        who executed it on behalf of such corporation, and acknowledged to me
        that such corporation executed the within instrument.

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


                                                         /s/ Todd Gately
                                                  -----------------------------
                                                         Notary Public


[Notarial Seal]




<PAGE>



STATE OF CALIFORNIA           )
                              )   ss.:
COUNTY OF LOS ANGELES         )

                      On this 29th day of November, 2004 before me, a notary
        public in and for said State, appeared Stephanie Whited, personally
        known to me on the basis of satisfactory evidence to be a Vice President
        of The Bank of New York Trust Company, N.A., one of the corporations
        that executed the within instrument, and also known to me to be the
        person who executed it on behalf of such corporation and acknowledged
        to me that such corporation executed the within instrument.

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


                                                  /s/ Nathan Harvey Reddicks Jr.
                                                 -------------------------------
                                                         Notary Public


[Notarial Seal]




<PAGE>




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

               On this 29th day of November, 2004 before me, a notary public
in and for said State, appeared Paul Connolly, personally known to me on the
basis of satisfactory evidence to be a Vice President of The Bank of New York,
a New York banking corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation,
and acknowledged to me that such corporation executed the within instrument.

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


                                                      /s/ Karen Katlan
                                                  -----------------------------
                                                         Notary Public


[Notarial Seal]





<PAGE>

                                                                    Exhibit A-1
                                                                  through A-27


                         [Exhibits A-1 through A-27 are
                 photocopies of such Certificates as delivered.]

                [See appropriate documents delivered at closing.]

                                      A-1
<PAGE>


                                                                     Exhibit B

                   Exhibit B-1 and Exhibit B-2 are photocopies
                       of the Class PF and PV Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      B-1
<PAGE>


                                                                      Exhibit C

                   Exhibit C-1 and Exhibit C-2 are photocopies
                    of the Class CF and Class CV Certificates
                                  as delivered.


                [See appropriate documents delivered at closing.]


                                      C-1
<PAGE>


                                                                     Exhibit D

                            Exhibit D is a photocopy
                          of the Class A-R Certificate
                                  as delivered.



                [See appropriate documents delivered at closing.]


                                      D-1
<PAGE>

                                                                     Exhibit E


                            Exhibit E is a photocopy
                of the Tax Matters Person Certificate (Class A-R)
                                  as delivered.

                [See appropriate documents delivered at closing.]


                                      E-1
<PAGE>

                                                           Exhibit F-1 and F-2


              [Exhibit F-1 and F-2 are schedules of Mortgage Loans]

         [Delivered to Trustee at closing and on file with the Trustee.]


                                      F-1
<PAGE>

                                   EXHIBIT G-1

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE


                                     [Date]


[Depositor]

[Sellers]

[Master Servicer]



                  Re:  CWABS Asset-Backed Certificates, Series 2004-12

Gentlemen:

                  In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of November 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide LFT LLC, as Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, the undersigned, as Trustee, The Bank of New York Trust Company, N.A.,
as Co-Trustee, the undersigned, as Trustee, hereby certifies that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or listed in the attached list of exceptions) the Co-Trustee has
received:

                  (i) the original Mortgage Note, endorsed by the applicable
Seller or the originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of ______________, without recourse", or, if
the original Mortgage Note has been lost or destroyed and not replaced, an
original lost note affidavit from the applicable Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note; and

                  (ii) a duly executed assignment of the Mortgage in the form
permitted by Section 2.01 of the Pooling and Servicing Agreement.

                  Based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and related to
such Mortgage Loan.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of


                                     G-1-1
<PAGE>

the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.


                                     G-1-2
<PAGE>

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.

                               The Bank of New York,
                                   as Trustee



                               By:  ________________________________
                                    Name:
                                    Title:


                                     G-1-3
<PAGE>


                                   EXHIBIT G-2

                    FORM OF INTERIM CERTIFICATION OF TRUSTEE

                                     [Date]


[Depositor]

[Sellers]

[Master Servicer]



                  Re:   CWABS Asset-Backed Certificates, Series 2004-12
                        -----------------------------------------------

Gentlemen:

                  In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of November 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide LFT LLC, as Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, the undersigned, as Trustee, and The Bank of New York Trust Company,
N.A., as Co-Trustee, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached list of exceptions) the Co-Trustee has received:

                  (i) original Mortgage Note, endorsed by the applicable Seller
or the originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _______________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the applicable Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit from the applicable
Seller, stating that the original Mortgage Note was lost or destroyed, together
with a copy of the related Mortgage Note;

                  (ii) the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of each Mortgage
Loan that is a MERS Mortgage Loan, the original Mortgage, noting thereon the
presence of the MIN of the Mortgage Loan and language indicating that the
Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded;

                  (iii) the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2004-12, CWABS, Inc., by The Bank of New York, a New York
banking corporation, as trustee under the Pooling and Servicing Agreement dated
as of November 1, 2004, without recourse", or, in the case of each Mortgage Loan
with respect to property located in the State of California that is not


                                     G-2-1
<PAGE>

a MERS Mortgage  Loan, a duly executed  assignment of the Mortgage in blank
(each such assignment, when duly and validly completed, to be in recordable form
and sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which such assignment relates);

                  (iv) original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such Mortgage
[(noting the presence of a MIN in the case of each MERS Mortgage Loan)];

                  (v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with evidence of recording
thereon if recordation thereof is permissible under applicable law; and

                  (vi) the original or duplicate original lender's title policy
or a printout of the electronic equivalent and all riders thereto or, in the
event such original title policy has not been received from the insurer, any one
of an original title binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title company, with the
original policy of title insurance to be delivered within one year of the
Closing Date.

                  In the event that in connection with any Mortgage Loan that is
not a MERS Mortgage Loan the applicable Seller cannot deliver the original
recorded Mortgage or all interim recorded assignments of the Mortgage satisfying
the requirements of clause (ii), (iii) or (iv), as applicable, the Co-Trustee
has received, in lieu thereof, a true and complete copy of such Mortgage and/or
such assignment or assignments of the Mortgage, as applicable, each certified by
the applicable Seller, the applicable title company, escrow agent or attorney,
or the originator of such Mortgage Loan, as the case may be, to be a true and
complete copy of the original Mortgage or assignment of Mortgage submitted for
recording.

                  Based on its review and examination and only as to the
foregoing documents, (i) such documents appear regular on their face and related
to such Mortgage Loan, and (ii) the information set forth in items (i), (iv),
(v), (vi), (viii), (xi) and (xiv) of the definition of the "Mortgage Loan
Schedule" in Section 1.01 of the Pooling and Servicing Agreement accurately
reflects information set forth in the Mortgage File.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.


                                     G-2-2
<PAGE>

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.

                              The Bank of New York,
                                   as Trustee



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


                                     G-2-3
<PAGE>



                                   EXHIBIT G-3

                      FORM OF DELAY DELIVERY CERTIFICATION

                                     [Date]


[Depositor]

[Sellers]

[Master Servicer]



                  Re:   CWABS Asset-Backed Certificates, Series 2004-12

Gentlemen:

                  [Reference is made to the Initial Certification of Trustee
relating to the above-referenced series, with the schedule of exceptions
attached thereto, delivered by the undersigned, as Trustee, on the Closing Date
in accordance with Section 2.02 of the Pooling and Servicing Agreement dated as
of November 1, 2004 (the "Pooling and Servicing Agreement") among CWABS, Inc.,
as Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide LFT LLC, as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, the
undersigned, as Trustee, The Bank of New York Trust Company, N.A., as
Co-Trustee.] The undersigned hereby certifies that as to each Delay Delivery
Mortgage Loan listed on the Schedule A attached hereto (other than any Mortgage
Loan paid in full or listed on Schedule B attached hereto) it has received:

                  (1) the original Mortgage Note, endorsed by the applicable
Seller or the originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from the
originator to the applicable Seller, or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note affidavit from the
applicable Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;

                  (2) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2004-12, CWABS, Inc., by The Bank of New York, a New York
banking corporation, as trustee under the Pooling and Servicing Agreement dated
as of November 1, 2004, without recourse", or, in the case of each Mortgage Loan
with respect to property located in the State of California that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage in blank (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which such assignment relates).



                                     G-3-1
<PAGE>

                  Based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and related to
such Mortgage Loan.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.

                                   The Bank of New York,
                                       as Trustee



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


                                     G-3-2
<PAGE>

                                    EXHIBIT H

                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [Date]


[Depositor]
[Master Servicer]
[Sellers]
[The Class 1-AV-1 Insurer]

                  Re:  CWABS Asset-Backed Certificates, Series 2004-12

Gentlemen:

                  In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of November 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, Countrywide LFT LLC, as Seller, as Master
Servicer, the undersigned, as Trustee, The Bank of New York Trust Company, N.A.,
as Co-Trustee, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or listed on the attached Document Exception Report) it has
received:

                  (i) the original Mortgage Note, endorsed by the applicable
Seller or the originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _________________ without recourse", with
all intervening endorsements that show a complete chain of endorsement from the
originator to the applicable Seller, or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note affidavit from the
applicable Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;

                  (ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of each Mortgage
Loan that is a MERS Mortgage Loan, the original Mortgage, noting thereon the
presence of the MIN of the Mortgage Loan and language indicating that the
Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded];

                  (iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2004-12, CWABS, Inc., by The Bank of New York, a New York
banking corporation, as trustee under the Pooling and Servicing Agreement dated
as of November 1, 2004, without recourse", or, in the case of each Mortgage Loan
with respect to property located in the State of California that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage in blank (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which such assignment relates);


                                      H-1
<PAGE>

                  (iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such Mortgage (noting
the presence of a MIN in the case of each MERS Mortgage Loan);

                  (v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with evidence of recording
thereon if recordation thereof is permissible under applicable law; and

                  (vi) the original or duplicate original lender's title policy
or a printout of the electronic equivalent and all riders thereto or any one of
an original title binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title company.

                  If the public recording office in which a Mortgage or
assignment thereof is recorded has retained the original of such Mortgage or
assignment, the Trustee has received, in lieu thereof, a copy of the original
Mortgage or assignment so retained, with evidence of recording thereon,
certified to be true and complete by such recording office.

                  Based on its review and examination and only as to the
foregoing documents, (i) such documents appear regular on their face and related
to such Mortgage Loan, and (ii) the information set forth in items (i), (iv),
(v), (vi), (viii), (ix) and (xvii) of the definition of the "Mortgage Loan
Schedule" in Section 1.01 of the Pooling and Servicing Agreement accurately
reflects information set forth in the Mortgage File.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.



                                      H-2
<PAGE>

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.

                                   The Bank of New York,
                                    as Trustee



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

                                      H-3
<PAGE>


                                   EXHIBIT I-1

                TRANSFER AFFIDAVIT FOR THE CLASS A-R CERTIFICATES

STATE OF                                 )
                                              ) ss.:
COUNTY OF                                )

                  The undersigned, being first duly sworn, deposes and says
as follows:

                  1. The undersigned is an officer of _______________, the
proposed Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated as
of November 1, 2004 (the "Agreement"), by and among CWABS, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as Seller, Countrywide LFT LLC,
as Seller, Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of
New York Trust Company, N.A., as Co-Trustee and The Bank of New York, as
Trustee. Capitalized terms used, but not defined herein or in Exhibit 1 hereto,
shall have the meanings ascribed to such terms in the Agreement. The Transferee
has authorized the undersigned to make this affidavit on behalf of the
Transferee.

                  2. The Transferee is not an employee benefit plan that is
subject to Title I of ERISA or to section 4975 of the Internal Revenue Code of
1986, nor is it acting on behalf of or with plan assets of any such plan. The
Transferee is, as of the date hereof, and will be, as of the date of the
Transfer, a Permitted Transferee. The Transferee will endeavor to remain a
Permitted Transferee for so long as it retains its Ownership Interest in the
Certificate. The Transferee is acquiring its Ownership Interest in the
Certificate for its own account.

                  3. The Transferee has been advised of, and understands that
(i) a tax will be imposed on Transfers of the Certificate to Persons that are
not Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.

                  4. The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)

                                     I-1-1
<PAGE>

                  5. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement (attached hereto as Exhibit 2 and incorporated herein
by reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.

                  6. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J-1 to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to which
the Transfer is to be made is not a Permitted Transferee.

                  7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Class A-R Certificates.

                  8. The Transferee's taxpayer identification number is _____.

                  9. The Transferee is a U.S. Person as defined in Code section
7701(a)(30).

                  10. The Transferee is aware that the Class A-R Certificates
may be "noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
Holder of a noneconomic residual interest, the Transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
Transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.

                  11. The Transferee has provided financial statements or other
financial information requested by the Transferor in connection with the
transfer of the Class A-R Certificates to permit the Transferor to assess the
financial capability of the Transferee to pay such taxes.

                                      * * *

                                     I-1-2
<PAGE>


                  IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf,  pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested,  this ____ day of _____________, 20__.

                                     [NAME OF TRANSFEREE]


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


[Corporate Seal]
ATTEST:

-------------------------
[Assistant] Secretary
                  Personally appeared before me the above-named _____________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ____________ of the Transferee, and acknowledged that
he executed the same as his free act and deed and the free act and deed of the
Transferee.

                  Subscribed and sworn before me this ____ day of _______, 20__.



                                 -------------------------------------
                                              NOTARY PUBLIC
                                 My Commission expires the ___ day of
                                              , 20__.

                                     I-1-3
<PAGE>

                               Certain Definitions

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

                  "Permitted Transferee": Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or a partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trustor unless such Person has
furnished the transferor and the Trustee with a duly completed Internal Revenue
Service Form W-8ECI, and (vii) any other Person so designated by the Trustee
based upon an Opinion of Counsel that the Transfer of an Ownership Interest in a
Class A-R Certificate to such Person may cause any REMIC formed hereunder to
fail to qualify as a REMIC at any time that any Certificates are Outstanding.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.

                  "Person": Any individual, corporation, limited liability
company, partnership, joint venture, bank, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.

                  "Transfer": Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate, including the acquisition of a Certificate
by the Depositor.

                  "Transferee":  Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.


                                     I-1-4
<PAGE>

                        Section 5.02(c) of the Agreement

                  (c) Each Person who has or who acquires any Ownership Interest
in a Class A-R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:

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

                  (ii) No Ownership Interest in a Class A-R Certificate may be
         registered on the Closing Date or thereafter transferred, and the
         Trustee shall not register the Transfer of any Class A-R Certificate
         unless, the Trustee shall have been furnished with an affidavit (a
         "Transfer Affidavit") of the initial owner or the proposed transferee
         in the form attached hereto as Exhibit I-1 or Exhibit I-2,
         respectively.

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Class A-R Certificate shall agree (A) to obtain a Transfer
         Affidavit from any other Person to whom such Person attempts to
         Transfer its Ownership Interest in a Class A-R Certificate, (B) to
         obtain a Transfer Affidavit from any Person for whom such Person is
         acting as nominee, trustee or agent in connection with any Transfer of
         a Class A-R Certificate and (C) not to Transfer its Ownership Interest
         in a Class A-R Certificate, or to cause the Transfer of an Ownership
         Interest in a Class A-R Certificate to any other Person, if it has
         actual knowledge that such Person is not a Permitted Transferee.

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Class A-R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Class A-R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class A-R
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Class A-R Certificate that is in fact
         not permitted by Section 5.02(b) and this Section 5.02(c) or for making
         any payments due on such Certificate to the Holder thereof or taking
         any other action with respect to such Holder under the provisions of
         this Agreement so long as the Transfer was registered after receipt of
         the related Transfer Affidavit and Transferor Certificate. The Trustee
         shall be entitled but not obligated to recover from any Holder of a
         Class A-R Certificate that was in fact not a Permitted Transferee at
         the time it became a Holder or, at such subsequent time as it became
         other than a Permitted Transferee, all payments made on such Class A-R
         Certificate at and after either such time. Any such payments so
         recovered by the Trustee shall be paid and delivered by the Trustee to
         the last preceding Permitted Transferee of such Certificate.


                                     I-1-5
<PAGE>

                  (v) The Master Servicer shall use its best efforts to make
         available, upon receipt of written request from the Trustee, all
         information necessary to compute any tax imposed under section 860E(e)
         of the Code as a result of a Transfer of an Ownership Interest in a
         Class A-R Certificate to any Holder who is not a Permitted Transferee.

                  The restrictions on Transfers of a Class A-R Certificate set
forth in this section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the Sellers or
the Master Servicer to the effect that the elimination of such restrictions will
not cause any constituent REMIC of any REMIC formed hereunder to fail to qualify
as a REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any ownership Interest in a Class A-R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class A-R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class A-R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.



                                     I-1-6
<PAGE>


                                   EXHIBIT J-1

            FORM OF TRANSFEROR CERTIFICATE FOR CLASS A-R CERTIFICATES

                                      Date:


CWABS, Inc.
as Depositor
4500 Park Granada
Calabasas, California  91302
The Bank of New York
as Trustee
101 Barclay Street
New York, New York  10286

           Re:  CWABS, Inc. Asset Backed
                Certificates, Series 2004-12
                ----------------------------

Ladies and Gentlemen:

                  In connection with our disposition of the Class A-R
Certificates, we certify that we have no knowledge that the Transferee is not a
Permitted Transferee. All capitalized terms used herein but not defined herein
shall have the meanings assigned to them in the Pooling and Servicing Agreement
dated as of November 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as Seller, Countrywide LFT LLC, as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee, and The Bank of New York, as Trustee.

                                        Very truly yours,



                                        -------------------------------------
                                        Name of Transferor


                                        By: _________________________________
                                        Name:
                                        Title:

                                     J-1-1
<PAGE>


                                   EXHIBIT J-2

                       FORM OF TRANSFEROR CERTIFICATE FOR
                              PRIVATE CERTIFICATES

                                      Date:


CWABS, Inc.,
                           as Depositor
4500 Park Granada
Calabasas, California 91302
The Bank of New York,
                           as Trustee
101 Barclay Street
New York, New York  10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-12, Class [  ]


Ladies and Gentlemen:

                  In connection with our disposition of the above-captioned
Certificates we certify that (a) we understand that the Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to, or
solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner that
would be deemed, or taken any other action which would result in, a violation of
Section 5 of the Act. All capitalized terms used herein but not defined herein
shall have the meanings assigned to them in the Pooling and Servicing Agreement
dated as of November 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as Seller, Countrywide LFT LLC, as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee, and The Bank of New York, as Trustee.

                                                Very truly yours,


                                                -------------------------------
                                                Name of Transferor


                                                By: ___________________________
                                                Name:
                                                Title:
                                     J-2-1
<PAGE>


                                    EXHIBIT K

                    FORM OF INVESTMENT LETTER (NON-RULE 144A)

                                      Date:


CWABS, Inc.,
                           as Depositor
4500 Park Granada
Calabasas, California 91302
The Bank of New York,
                           as Trustee
101 Barclay St., 8W
New York, New York  10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-12, Class [  ]


Ladies and Gentlemen:

                  In connection with our acquisition of the above-captioned
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, [(b)
we are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d)] either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, or using the assets of any such plan or arrangement to
effect such acquisition or (ii) if the Certificates have been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we are
acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective



                                      K-1
<PAGE>

registration statement under the Act or is exempt from such registration
requirements, and if requested, we will at our expense provide an opinion
of counsel satisfactory to the addressees of this Certificate that such
sale, transfer or other disposition may be made pursuant to an exemption from
the Act, (2) the purchaser or transferee of such Certificate has executed and
delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement.

                  All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement dated
as of November 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, Countrywide LFT LLC, as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee, and The Bank of New York, as Trustee.

                                                     Very truly yours,


                                                     -------------------------
                                                     Name of Transferee

                                                     By: _____________________
                                                          Authorized Officer

                                      K-2
<PAGE>

                                    EXHIBIT L

                            FORM OF RULE 144A LETTER

                                      Date:


CWABS, Inc.,
                           as Depositor
4500 Park Granada
Calabasas, California 91302
The Bank of New York,
                           as Trustee
101 Barclay Street
New York, New York  10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-12, Class [  ]

Ladies and Gentlemen:

                  In connection with our acquisition of the above-captioned
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement, or using the assets of any such plan or
arrangement to effect such acquisition or (ii) if the Certificates have been the
subject of an ERISA-Qualifying Underwriting, we are an insurance company which
is purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and the purchase and holding
of such Certificates are covered under Sections I and III of PTCE 95-60, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto,


                                      L-1
<PAGE>

nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.

                  All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement dated
as of November 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, Countrywide LFT LLC, as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee, and The Bank of New York, as Trustee.

                                                Very truly yours,

                                                ------------------------------
                                                Name of Transferee

                                                By: __________________________
                                                       Authorized Officer


                                      L-2
<PAGE>

                              ANNEX 1 TO EXHIBIT L

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
         As indicated below, the undersigned is the President, Chief Financial
            Officer, Senior Vice President or other executive officer of the
            Buyer.

         In connection with purchases by the Buyer, the Buyer is a "qualified
            institutional buyer" as that term is defined in Rule 144A under
            the Securities Act of 1933, as amended ("Rule 144A") because (i)
            the Buyer owned and/or invested on a discretionary basis either at
            least $100,000,000 in securities or, if Buyer is a dealer, Buyer
            must own and/or invest on a discretionary basis at least
            $10,000,000 in securities (except for the excluded securities
            referred to below) as of the end of the Buyer's most recent fiscal
            year (such amount being calculated in accordance with Rule 144A
            and (ii) the Buyer satisfies the criteria in the category marked
            below.

            ___   Corporation, etc. The Buyer is a corporation (other than a
                  bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or
                  charitable organization described in Section 501(c)(3) of
                  the Internal Revenue Code of 1986, as amended.

            ___   Bank. The Buyer (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official
                  or is a foreign bank or equivalent institution, and (b) has
                  an audited net worth of at least $25,000,000 as demonstrated
                  in its latest annual financial statements, a copy of which
                  is attached hereto.

            ___   Savings and Loan. The Buyer (a) is a savings and loan
                  association, building and loan association, cooperative
                  bank, homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority
                  having supervision over any such institutions or is a
                  foreign savings and loan association or equivalent
                  institution and (b) has an audited net worth of at least
                  $25,000,000 as demonstrated in its latest annual financial
                  statements, a copy of which is attached hereto.

            ___   Broker-dealer.  The Buyer is a dealer registered pursuant to
                  Section 15 of the Securities Exchange Act of 1934.

            ___   Insurance Company. The Buyer is an insurance company whose
                  primary and predominant business activity is the writing of
                  insurance or the reinsuring of

                                      L-3
<PAGE>

                  risks underwritten by insurance companies and which is
                  subject to supervision by the insurance commissioner or a
                  similar official or agency of a State, territory or the
                  District of Columbia.

            ___   State or Local Plan. The Buyer is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

            ___   ERISA  Plan.  The Buyer is an employee benefit plan within
                  the meaning of Title I of the Employee Retirement Income
                  Security Act of 1974.

            ___   Investment Advisor.  The Buyer is an investment advisor
                  registered under the Investment Advisors Act of 1940.

            ___   Small Business Investment Company. Buyer is a small business
                  investment company licensed by the U.S. Small Business
                  Administration under Section 301(c) or (d) of the Small
                  Business Investment Act of 1958.

            ___   Business Development Company.  Buyer is a business
                  development company as defined in Section 202(a)(22) of the
                  Investment Advisors Act of 1940.

       The  term "securities" as used herein does not include (i) securities
            of issuers that are affiliated with the Buyer, (ii) securities
            that are part of an unsold allotment to or subscription by the
            Buyer, if the Buyer is a dealer, (iii) securities issued or
            guaranteed by the U.S. or any instrumentality thereof, (iv) bank
            deposit notes and certificates of deposit, (v) loan
            participations, (vi) repurchase agreements, (vii) securities owned
            but subject to a repurchase agreement and (viii) currency,
            interest rate and commodity swaps.

       For  purposes of determining the aggregate amount of securities owned
            and/or invested on a discretionary basis by the Buyer, the Buyer
            used the cost of such securities to the Buyer and did not include
            any of the securities referred to in the preceding paragraph,
            except (i) where the Buyer reports its securities holdings in its
            financial statements on the basis of their market value, and (ii)
            no current information with respect to the cost of those
            securities has been published. If clause (ii) in the preceding
            sentence applies, the securities may be valued at market. Further,
            in determining such aggregate amount, the Buyer may have included
            securities owned by subsidiaries of the Buyer, but only if such
            subsidiaries are consolidated with the Buyer in its financial
            statements prepared in accordance with generally accepted
            accounting principles and if the investments of such subsidiaries
            are managed under the Buyer's direction. However, such securities
            were not included if the Buyer is a majority-owned, consolidated
            subsidiary of another enterprise and the Buyer is not itself a
            reporting company under the Securities Exchange Act of 1934, as
            amended.

       The  Buyer acknowledges that it is familiar with Rule 144A and
            understands that the seller to it and other parties related to the
            Certificates are relying and will continue to rely on the
            statements made herein because one or more sales to the Buyer may
            be in reliance on Rule 144A.

                                      L-4
<PAGE>

       Until the date of purchase of the Rule 144A Securities, the Buyer will
            notify each of the parties to which this certification is made of
            any changes in the information and conclusions herein. Until such
            notice is given, the Buyer's purchase of the Certificates will
            constitute a reaffirmation of this certification as of the date of
            such purchase. In addition, if the Buyer is a bank or savings and
            loan is provided above, the Buyer agrees that it will furnish to
            such parties updated annual financial statements promptly after
            they become available.

                                      ------------------------------------
                                             Print Name of Buyer


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


                                      Date:
                                           --------------------------------

                                      L-5
<PAGE>

                                                         ANNEX 2 TO EXHIBIT L

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That are Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

         In   connection with purchases by Buyer, the Buyer is a "qualified
              institutional buyer" as defined in SEC Rule 144A because (i) the
              Buyer is an investment company registered under the Investment
              Company Act of 1940, as amended and (ii) as marked below, the
              Buyer alone, or the Buyer's Family of Investment Companies, owned
              at least $100,000,000 in securities (other than the excluded
              securities referred to below) as of the end of the Buyer's most
              recent fiscal year. For purposes of determining the amount of
              securities owned by the Buyer or the Buyer's Family of Investment
              Companies, the cost of such securities was used, except (i) where
              the Buyer or the Buyer's Family of Investment Companies reports
              its securities holdings in its financial statements on the basis
              of their market value, and (ii) no current information with
              respect to the cost of those securities has been published. If
              clause (ii) in the preceding sentence applies, the securities may
              be valued at market.

         ___    The Buyer owned $     in securities (other than the excluded
                securities referred to below) as of the end of the Buyer's most
                recent fiscal year (such amount being calculated in accordance
                with Rule 144A).

         ___    The Buyer is part of a Family of Investment Companies which
                owned in the aggregate $       in securities (other than the
                excluded securities referred to below) as of the end of the
                Buyer's most recent fiscal year (such amount being calculated
                in accordance with Rule 144A).

     The term "Family of Investment Companies" as used herein means two or more
         registered investment companies (or series thereof) that have the same
         investment adviser or investment advisers that are affiliated (by
         virtue of being majority owned subsidiaries of the same parent or
         because one investment adviser is a majority owned subsidiary of the
         other).

     The term "securities" as used herein does not include (i) securities of
         issuers that are affiliated with the Buyer or are part of the Buyer's
         Family of Investment Companies, (ii) securities issued or guaranteed by
         the U.S. or any instrumentality thereof, (iii) bank deposit notes and
         certificates of deposit, (iv) loan participations, (v) repurchase


                                      L-6
<PAGE>

         agreements, (vi) securities owned but subject to a repurchase agreement
         and (vii) currency, interest rate and commodity swaps.

     The Buyer is familiar with Rule 144A and under-stands that the parties
         listed in the Rule 144A Transferee Certificate to which this
         certification relates are relying and will continue to rely on the
         statements made herein because one or more sales to the Buyer will be
         in reliance on Rule 144A. In addition, the Buyer will only purchase for
         the Buyer's own account.

     Until the date of purchase of the Certificates, the undersigned will notify
         the parties listed in the Rule 144A Transferee Certificate to which
         this certification relates of any changes in the information and
         conclusions herein. Until such notice is given, the Buyer's purchase of
         the Certificates will constitute a reaffirmation of this certification
         by the undersigned as of the date of such purchase.


                                           _______________________________
                                              Print Name of Buyer or Adviser


                                      By: ________________________________
                                      Name:
                                      Title:


                                      IF AN ADVISER:



                                       ___________________________________
                                               Print Name of Buyer


                                       Date:
                                            ------------------------------

                                      L-7
<PAGE>

                                    EXHIBIT M


                      FORM OF REQUEST FOR DOCUMENT RELEASE

Loan Information
         Name of Mortgagor:            _____________________________________

         Master Servicer
         Loan No.:                     _____________________________________

Co-Trustee
         Name:                         _____________________________________

         Address:                      _____________________________________

                                       ______________________________________


         Co-Trustee
         Mortgage File No.:            ______________________________________

          The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Co-Trustee for the
Holders of Asset-Backed Certificates, Series 2004-12, the documents referred
to below (the "Documents"). All capitalized terms not otherwise defined in
this Request for Document Release shall have the meanings given them in the
Pooling and Servicing Agreement dated as of November 1, 2004 (the "Pooling and
Servicing Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Countrywide LFT LLC, as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York, as Trustee and The
Bank of New York Trust Company, N.A., as Co-Trustee.

(  )     Mortgage Note dated ___________,  ____, in the original principal sum
         of $________,  made by  __________________,  payable to, or endorsed
         to the order of, the Trustee.
(  )     Mortgage recorded on  _________________  as instrument no.  __________
         in the County Recorder's Office of the County of _______________,
         State  of  _______________  in book/reel/docket  _______________ of
         official records at page/image _________.
(  )     Deed of Trust recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County
         of ________________,  State of  _______________ in book/reel/docket
         _______________  of official records at page/image _______________.
(  )     Assignment of Mortgage or Deed of Trust to the Trustee,  recorded on
         _________________  as instrument no.  __________ in the County
         Recorder's Office of the County of __________, State of  ____________
         in book/reel/docket _______________ of official records at page/image
         _____________.
(  )     Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.
(  )     ______________________________________________


                                     M-1
<PAGE>

(  )     ______________________________________________
(  )     ______________________________________________
(  )     ______________________________________________
         The undersigned Master Servicer hereby acknowledges and agrees as
follows:

                  (1) The Master Servicer shall hold and retain possession of
         the Documents in trust for the benefit of the Trust Fund, solely for
         the purposes provided in the Pooling and Servicing Agreement.

                  (2) The Master Servicer shall not cause or knowingly permit
         the Documents to become subject to, or encumbered by, any claim, liens,
         security interest, charges, writs of attachment or other impositions
         nor shall the Master Servicer assert or seek to assert any claims or
         rights of setoff to or against the Documents or any proceeds thereof.

                  (3) The Master Servicer shall return each and every Document
         previously requested from the Mortgage File to the Co-Trustee when the
         need therefor no longer exists, unless the Mortgage Loan relating to
         the Documents has been liquidated and the proceeds thereof have been
         remitted to the Certificate Account and except as expressly provided in
         the Pooling and Servicing Agreement.

                  (4) The Documents and any proceeds thereof, including any
         proceeds of proceeds, coming into the possession or control of the
         Master Servicer shall at all times be earmarked for the account of the
         Trust Fund, and the Master Servicer shall keep the Documents and any
         proceeds separate and distinct from all other property in the Master
         Servicer's possession, custody or control.

                                            [Master Servicer]


                                             By  ______________________________


                                             Its ______________________________


                                             Date: _________________, ____


                                     M-2
<PAGE>

                                    EXHIBIT N

                        FORM OF REQUEST FOR FILE RELEASE

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                           ASSET-BACKED CERTIFICATES,
                                 Series 2004-12

__________________________________  HEREBY CERTIFIES THAT HE/SHE IS AN OFFICER
OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER SIGNATURE,
AND HEREBY FURTHER CERTIFIES AS FOLLOWS:  WITH RESPECT TO THE MORTGAGE LOANS,
AS THE TERM IS DEFINED IN THE POOLING AND SERVICING AGREEMENT DESCRIBED IN THE
ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE  LOAN  REPURCHASE  PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.]
[THE MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE  PROCEEDS]
[LIQUIDATION  PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING  AGREEMENT.]  [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________                                  BORROWER'S
NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only:  The Master Servicer certifies that
[an] [no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO
SECTION 3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE
CREDITED.
____________               _____________________     DATED:____________

/ /                        VICE PRESIDENT
/ /                        ASSISTANT VICE PRESIDENT

                                     N-1
<PAGE>
                                                                Exhibit O

                            Exhibit O is a photocopy
                           of the Depository Agreement
                                  as delivered.

           [See appropriate documents delivered at closing.]



                                     O-1
<PAGE>
                                  EXHIBIT P

                                  [Reserved].

                                     P-1
<PAGE>
                                   EXHIBIT Q-1

                      FORM OF CLASS AF-1 CORRIDOR CONTRACT

               [See appropriate documents delivered at closing.]

                                    Q-1-1
<PAGE>


                                   EXHIBIT Q-2

                              FORM OF CLASS 1-AV-1

                                CORRIDOR CONTRACT

               [See appropriate documents delivered at closing.]

                                    Q-2-1
<PAGE>

                                  EXHIBIT Q-3

                     FORM OF CLASS 2-AV CORRIDOR CONTRACT

               [See appropriate documents delivered at closing.]


                                    Q-3-1
<PAGE>

                                   EXHIBIT Q-4

              FORM OF ADJUSTABLE RATE SUBORDINATE CORRIDOR CONTRACT

               [See appropriate documents delivered at closing.]


                                    Q-4-1
<PAGE>


                                   EXHIBIT R

                          FORM OF CLASS 1-AV-1 POLICY

                     CERTIFICATE GUARANTY INSURANCE POLICY

OBLIGATIONS:         CWABS, Inc.                         Policy Number: 45328
                     CWABS Asset-Backed Certificates Trust 2004-12
                     Asset-Backed Certificates, Series 2004-12
                     $1,010,990,000 Class 1-AV-1 Certificates


         MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete Insured
Payment will be received by The Bank of New York, or its successor, as trustee
for the Owners (the "Trustee"), on behalf of the Owners from the Insurer, for
distribution by the Trustee to each Owner of each Owner's proportionate share of
the Insured Payment. The Insurer's obligations hereunder with respect to a
particular Insured Payment shall be discharged to the extent funds equal to the
applicable Insured Payment are received by the Trustee, whether or not such
funds are properly applied by the Trustee. Insured Payments shall be made only
at the time set forth in this Policy, and no accelerated Insured Payments shall
be made regardless of any acceleration of the Obligations, unless such
acceleration is at the sole option of the Insurer.

         Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust Fund, any REMIC
or the Trustee for withholding taxes, if any (including interest and penalties
in respect of any such liability). This Policy will not provide credit
enhancement for any Class of Certificates other than the Class 1-AV-1
Certificates.

         The Insurer will pay any Insured Payment that is a Preference Amount on
the Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (i) a certified copy of the order requiring the return of a
preference payment, (ii) an opinion of counsel satisfactory to the Insurer that
such order is final and not subject to appeal, (iii) an assignment in such form
as is reasonably required by the Insurer, irrevocably assigning to the Insurer
all rights and claims of the Owner relating to or arising under the Obligations
against the debtor which made such preference payment or otherwise with respect
to such preference payment and (iv) appropriate instruments to effect the
appointment of the Insurer as agent for such Owner in any legal proceeding
related to such preference payment, such instruments being in a form
satisfactory to the Insurer, provided that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Owner and not to any Owner directly
unless such Owner has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.

                                     R-1
<PAGE>

         The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by U.S. Bank Trust National
Association, as fiscal agent for the Insurer or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent") of a Notice (as described below);
provided that if such Notice is received after 12:00 noon, New York City time,
on such Business Day, it will be deemed to be received on the following Business
Day. If any such Notice received by the Fiscal Agent is not in proper form or is
otherwise insufficient for the purpose of making claim hereunder, it shall be
deemed not to have been received by the Fiscal Agent for purposes of this
paragraph, and the Insurer or the Fiscal Agent, as the case may be, shall
promptly so advise the Trustee and the Trustee may submit an amended Notice.

         Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.

         The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under this Policy.

         As used herein, the following terms shall have the following meanings:

         "Agreement" means the Pooling and Servicing Agreement dated as of
November 1, 2004 among Countrywide Home Loans, Inc., as Seller, Countrywide LFT
LLC, as Seller, Countrywide Home Loans Servicing LP, as Master Servicer, CWABS,
Inc., as Depositor, the Trustee, as trustee, and The Bank of New York Trust
Company, N.A., as co-trustee, without regard to any amendment or supplement
thereto.

         "Business Day" means any day other than a Saturday, a Sunday or a day
on which the Insurer or banking institutions in New York City or in the city in
which the corporate trust office of the Trustee under the Agreement is located
are authorized or obligated by law or executive order to close.

         "Class 1-AV-1 Available Funds" means, with respect to any Distribution
Date, funds allocated from amounts available pursuant to the Agreement to make
distributions on the Class 1-AV-1 Certificates on such Distribution Date (other
than amounts received under the Class 1-AV-1 Corridor Contract).

         "Deficiency Amount" means, with respect to any Distribution Date, the
excess, if any, of Required Distributions for such Distribution Date over Class
1-AV-1 Available Funds.

         "Insured Payment" means (i) as of any Distribution Date, any Deficiency
Amount and (ii) any Preference Amount.

         "Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by telecopy substantially in the form of Exhibit A attached hereto,
the original of which is

                                     R-2
<PAGE>

subsequently delivered by registered or certified mail, from the Trustee
specifying the Insured Payment which shall be due and owing on the applicable
Distribution Date.

         "Owner" means each Class 1-AV-1 Certificateholder (as defined in the
Agreement) who, on the applicable Distribution Date, is entitled under the terms
of the Obligations to payment thereunder.

         "Preference Amount" means any amount previously distributed to an Owner
on the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.

         "Required Distributions" means, (a) with respect to any Distribution
Date, the sum, without duplication, of (i) the amount of interest that has
accrued on the Class 1-AV-1 Certificates at the then applicable Pass-Through
Rate during the applicable Accrual Period with respect to the Class 1-AV-1
Certificates, net of any interest shortfalls resulting from Prepayment Interest
Shortfalls and any interest shortfalls resulting from application of the
Servicemembers Civil Relief Act, or similar state or local laws and (ii) at the
election of the Class 1-AV-1 Insurer in its sole discretion, the amount, if any,
by which the Certificate Principal Balance of the Class 1-AV-1 Certificates
(after giving effect to all distributions, other than Required Distributions, to
be made on such Distribution Date) exceeds the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 2; and (b) on the Last Scheduled
Distribution Date, the outstanding Certificate Principal Balance of the Class
1-AV-1 Certificates (after giving effect to all distributions, other than
Required Distributions, to be made on such Distribution Date).

         Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment to
or modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.

         Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Insurer shall specify in writing to the Trustee.

         The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.

         This Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of law principles thereof.

         The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.

         This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason including payment, or provision being
made for payment, prior to maturity of the Obligations.

                                     R-3
<PAGE>

         IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested this 29th day of November, 2004.



                                         MBIA INSURANCE CORPORATION


                                         By
                                           ---------------------------------
                                           President



                                         Attest:


                                         By
                                           ---------------------------------
                                           Assistant Secretary

                                     R-4
<PAGE>

                                    EXHIBIT A


                    TO CERTIFICATE GUARANTY INSURANCE POLICY
                                  NUMBER: 45328


                        NOTICE UNDER CERTIFICATE GUARANTY
                         INSURANCE POLICY NUMBER: 45328

U.S. Bank Trust National Association, as Fiscal Agent
  for MBIA Insurance Corporation
61 Broadway, 15th Floor
New York, NY  10006
Attention:  Municipal Registrar and
              Paying Agency

MBIA Insurance Corporation
113 King Street
Armonk, NY  10504

         The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to U.S. Bank Trust National
Association (the "Fiscal Agent") and MBIA Insurance Corporation (the "Insurer"),
with reference to Certificate Guaranty Insurance Policy Number: 45328 (the
"Policy") issued by the Insurer in respect of the CWABS, Inc., CWABS
Asset-Backed Certificates Trust 2004-12, Asset-Backed Certificates, Series
2004-12, $1,010,990,000 Class 1-AV-1 Certificates (the "Obligations"), that:

                  (a) the Trustee is the trustee under the Pooling and Servicing
         Agreement dated as of November 1, 2004 among Countrywide Home Loans,
         Inc., as Seller, Countrywide LFT LLC, as Seller, Countrywide Home Loans
         Servicing LP, as Master Servicer, CWABS, Inc., as Depositor, the
         Trustee, as trustee, and The Bank of New York Trust Company, N.A., as
         co-trustee, for the Owners;

                  (b) the Class 1-AV-1 Available Funds for the Distribution Date
         occurring on [____________] (the "Applicable Distribution Date") is
         $[____________];

                  (c) the Required Distributions for the Applicable
         Distribution Date is $[____________];

                  (d) the excess, if any, of Required Distributions over Class
         1-AV-1 Available Funds for the Applicable Distribution Date is
         $[____________]; (the "Deficiency Amount")


                                     R-5
<PAGE>

                  (e) the amount of any previously distributed payments on the
         Obligations that is recoverable and sought to be recovered as a
         voidable preference by a trustee in bankruptcy pursuant to the
         Bankruptcy Code in accordance with a final nonappealable order of a
         court having competent jurisdiction is $[____________] (the "Preference
         Amount");

                  (f) the total Insured Payment due is $[____________], which
         amount equals the sum of the Deficiency Amount and the Preference
         Amount; and

                  (g) the Trustee directs that payment of the Insured Payment be
         made to the following account by bank wire transfer of federal or other
         immediately available funds in accordance with the terms of the Policy:
         [TRUSTEE'S ACCOUNT NUMBER].

         Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.

         Any Person Who Knowingly And With Intent To Defraud Any Insurance
Company Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim
For Each Such Violation.

         IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the [______] day of [______], [____________].



                                       [NAME OF TRUSTEE], as Trustee


                                        By__________________________________
                                        Title_______________________________

                                     R-6
<PAGE>


                                    EXHIBIT S

                 FORM OF CORRIDOR CONTRACT ASSIGNMENT AGREEMENT


               [See appropriate documents delivered at closing.]


                                     S-1
<PAGE>

                                    EXHIBIT T


                OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS


                           ASSET-BACKED CERTIFICATES,
                                 Series 2004-12

                                    [Date]


Via Facsimile

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York  10286

Dear Sir or Madam:

                  Reference is made to the Pooling and Servicing Agreement,
dated as of November 1, 2004, (the "Pooling and Servicing Agreement") among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide
LFT LLC, as Seller, Countrywide Home Loans Servicing LP, as Master Servicer, The
Bank of New York Trust Company, N.A., as Co-Trustee and The Bank of New York, as
Trustee. Capitalized terms used herein shall have the meanings ascribed to such
terms in the Pooling and Servicing Agreement.

                  __________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:

                  With respect to the Distribution Date in _________ 20[ ] and
each Mortgage Loan set forth in the attached schedule:

                  1. A Principal Prepayment in full or in part was received
during the related Prepayment Period;

                  2. Any Prepayment Charge due under the terms of the Mortgage
Note with respect to such Principal Prepayment was or was not, as indicated on
the attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;

                  3. As to each Mortgage Loan set forth on the attached schedule
for which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:

                           (i) the Master Servicer's determination that such
         waiver would maximize recovery of Liquidation Proceeds for such
         Mortgage Loan, taking into account the value of such Prepayment Charge,
         or

                                     T-1
<PAGE>

                           (ii)(A) the enforceability thereof is limited (1) by
         bankruptcy, insolvency, moratorium, receivership, or other similar law
         relating to creditors' rights generally or (2) due to acceleration in
         connection with a foreclosure or other involuntary payment, or (B) the
         enforceability is otherwise limited or prohibited by applicable law;
         and

                  4. We certify that all amounts due in connection with the
waiver of a Prepayment Charge inconsistent with clause 3 above which are
required to be deposited by the Master Servicer pursuant to Section 3.20 of the
Pooling and Servicing Agreement, have been or will be so deposited.

                                         COUNTRYWIDE HOME LOANS, INC.,
                                          as Master Servicer


                                     T-2
<PAGE>


        SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
                     DURING THE RELATED PREPAYMENT PERIOD


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Loan Number                  Clause 2:  Yes/No           Clause 3:  (i) or (ii)
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                                     T-3
<PAGE>


                                   SCHEDULE I

           PREPAYMENT CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY


        [Delivered to Trustee at closing and on file with the Trustee.]



                                    S-I-1