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



                        FINANCIAL ASSET SECURITIES CORP.,
                                    Depositor



                         CENTEX HOME EQUITY COMPANY, LLC
                                    Servicer


                                       and


                              JPMORGAN CHASE BANK,
                                     Trustee




                         POOLING AND SERVICING AGREEMENT

                            Dated as of July 1, 2004




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

                             CHEC Loan Trust 2004-1

                    Asset-Backed Certificates, Series 2004-1


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


<PAGE>

<TABLE>
<CAPTION>
                                                TABLE OF CONTENTS

                                                                                                               Page
<S>                                                                                                            <C>

                                                     ARTICLE I

                                                    DEFINITIONS

SECTION 1.01.     Defined Terms...................................................................................6
SECTION 1.02.     Accounting.....................................................................................53
SECTION 1.03.     Allocation of Certain Interest Shortfalls......................................................53

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01.     Conveyance of Mortgage Loans...................................................................54
SECTION 2.02.     Acceptance by Trustee..........................................................................57
SECTION 2.03.     Repurchase or Substitution of Mortgage Loans by the Originator or the
                  Seller.........................................................................................58
SECTION 2.04.     Intentionally Omitted..........................................................................61
SECTION 2.05.     Representations, Warranties and Covenants of the Servicer......................................61
SECTION 2.06.     Representations and Warranties of the Depositor................................................63
SECTION 2.07.     Issuance of Certificates.......................................................................65
SECTION 2.08.     [Reserved].....................................................................................65
SECTION 2.09.     Conveyance of REMIC Regular Interests and Acceptance of REMIC 1,
                  REMIC 2, REMIC 3 and REMIC 4 by the Trustee; Issuance of
                  Certificates ..................................................................................65

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

SECTION 3.01.     Servicer to Act as Servicer....................................................................67
SECTION 3.02.     Sub-Servicing Agreements Between Servicer and Sub-Servicers....................................69
SECTION 3.03.     Successor Sub-Servicers........................................................................70
SECTION 3.04.     Liability of the Servicer......................................................................70
SECTION 3.05.     No Contractual Relationship Between Sub-Servicers and the Trustee or
                  Certificateholders.............................................................................70
SECTION 3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee...............................71


                                                         i
<PAGE>


SECTION 3.07.     Collection of Certain Mortgage Loan Payments...................................................71
SECTION 3.08.     Sub-Servicing Accounts.........................................................................72
SECTION 3.09.     Collection of Taxes, Assessments and Similar Items; Escrow Accounts............................72
SECTION 3.10.     Collection Account and Distribution Account....................................................73
SECTION 3.11.     Withdrawals from the Collection Account and Distribution
                           Account...............................................................................73
SECTION 3.12.     Investment of Funds in the Collection Account and the Distribution
                  Account........................................................................................77
SECTION 3.13.     [Reserved].....................................................................................78
SECTION 3.14.     Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
                  Coverage.......................................................................................78
SECTION 3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................80
SECTION 3.16.     Realization Upon Defaulted Mortgage Loans......................................................81
SECTION 3.17.     Trustee to Cooperate; Release of Mortgage Files................................................83
SECTION 3.18.     Servicing Compensation.........................................................................84
SECTION 3.19.     Reports to the Trustee; Collection Account Statements..........................................85
SECTION 3.20.     Statement as to Compliance.....................................................................85
SECTION 3.21.     Independent Public Accountants' Servicing Report...............................................85
SECTION 3.22.     Access to Certain Documentation; Filing of Reports by Trustee..................................86
SECTION 3.23.     Title, Management and Disposition of REO Property..............................................88
SECTION 3.24.     Obligations of the Servicer in Respect of Prepayment Interest Shortfalls.......................91
SECTION 3.25.     [Reserved].....................................................................................91
SECTION 3.26.     Obligations of the Servicer in Respect of Mortgage Rates and Monthly
                  Payments.......................................................................................91
SECTION 3.27.     [Reserved].....................................................................................91
SECTION 3.28.     [Reserved].....................................................................................91
SECTION 3.29.     Advance Facility...............................................................................91

                                                    ARTICLE IV

                                                   FLOW OF FUNDS

SECTION 4.01.     Distributions..................................................................................94
SECTION 4.02.     [Reserved]....................................................................................100
SECTION 4.03.     Statements....................................................................................101
SECTION 4.04.     Remittance Reports; Advances..................................................................103
SECTION 4.05.     [Reserved]....................................................................................105
SECTION 4.06.     Net WAC Rate Carryover Reserve Account........................................................105
SECTION 4.07.     Distributions on the REMIC 1 Regular Interests................................................106
SECTION 4.08.     Allocation of Realized Losses.................................................................107


                                                        ii
<PAGE>


                                                     ARTICLE V

                                                 THE CERTIFICATES

SECTION 5.01.     The Certificates..............................................................................110
SECTION 5.02.     Registration of Transfer and Exchange of Certificates.........................................110
SECTION 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.............................................115
SECTION 5.04.     Persons Deemed Owners.........................................................................116
SECTION 5.05.     Appointment of Paying Agent...................................................................116

                                                    ARTICLE VI

                                          THE SERVICER AND THE DEPOSITOR

SECTION 6.01.     Liability of the Servicer and the Depositor...................................................117
SECTION 6.02.     Merger or Consolidation of, or Assumption of the Obligations of, the
                  Servicer or the Depositor.....................................................................117
SECTION 6.03.     Limitation on Liability of the Servicer and Others............................................117
SECTION 6.04.     Servicer Not to Resign........................................................................118
SECTION 6.05.     Delegation of Duties..........................................................................118
SECTION 6.06.     [Reserved]....................................................................................118
SECTION 6.07.     Inspection....................................................................................119

                                                    ARTICLE VII

                                                      DEFAULT

SECTION 7.01.     Servicer Events of Termination................................................................120
SECTION 7.02.     Trustee to Act; Appointment of Successor......................................................122
SECTION 7.03.     Waiver of Defaults............................................................................123
SECTION 7.04.     Notification to Certificateholders............................................................123
SECTION 7.05.     Survivability of Servicer Liabilities.........................................................123

                                                   ARTICLE VIII

                                                    THE TRUSTEE

SECTION 8.01.     Duties of Trustee.............................................................................124
SECTION 8.02.     Certain Matters Affecting the Trustee.........................................................125
SECTION 8.03.     Trustee Not Liable for Certificates or Mortgage Loans.........................................126
SECTION 8.04.     Trustee May Own Certificates..................................................................127
SECTION 8.05.     Trustee Fee and Expenses......................................................................127
SECTION 8.06.     Eligibility Requirements for Trustee..........................................................128


                                                        iii
<PAGE>


SECTION 8.07.     Resignation or Removal of Trustee.............................................................128
SECTION 8.08.     Successor Trustee.............................................................................129
SECTION 8.09.     Merger or Consolidation of Trustee............................................................129
SECTION 8.10.     Appointment of Co-Trustee or Separate Trustee.................................................130
SECTION 8.11.     Limitation of Liability.......................................................................131
SECTION 8.12.     Trustee May Enforce Claims Without Possession of Certificates.................................131
SECTION 8.13.     Suits for Enforcement.........................................................................132
SECTION 8.14.     Waiver of Bond Requirement....................................................................132
SECTION 8.15.     Waiver of Inventory, Accounting and Appraisal Requirement.....................................132

                                                    ARTICLE IX

                                               REMIC ADMINISTRATION

SECTION 9.01.     REMIC Administration..........................................................................133
SECTION 9.02.     Prohibited Transactions and Activities........................................................135
SECTION 9.03.     Indemnification with Respect to Certain Taxes and Loss of REMIC Status........................135

                                                     ARTICLE X

                                                    TERMINATION

SECTION 10.01.    Termination...................................................................................137
SECTION 10.02.    Additional Termination Requirements...........................................................138

                                                     ARTICLE XI

                                              MISCELLANEOUS PROVISIONS

SECTION 11.01.    Amendment.....................................................................................140
SECTION 11.02.    Recordation of Agreement; Counterparts........................................................141
SECTION 11.03.    Limitation on Rights of Certificateholders....................................................141
SECTION 11.04.    Governing Law; Jurisdiction...................................................................142
SECTION 11.05.    Notices.......................................................................................142
SECTION 11.06.    Severability of Provisions....................................................................143
SECTION 11.07.    Article and Section References................................................................143
SECTION 11.08.    Notice to the Rating Agencies.................................................................143
SECTION 11.09.    Further Assurances............................................................................144
SECTION 11.10.    Benefits of Agreement.........................................................................144
SECTION 11.11     Acts of Certificateholders....................................................................144
</TABLE>


                                                        iv
<PAGE>



Exhibits:
---------

Exhibit A-1    Form of Class A-1 Certificates
Exhibit A-2    Form of Class A-2 Certificates
Exhibit A-3    Form of Class A-3 Certificates
Exhibit A-4    Form of Class M-1 Certificates
Exhibit A-5    Form of Class M-2 Certificates
Exhibit A-6    Form of Class M-3 Certificates
Exhibit A-7    Form of Class M-4 Certificates
Exhibit A-8    Form of Class M-5 Certificates
Exhibit A-9    Form of Class M-6 Certificates
Exhibit A-10   Form of Class M-7 Certificates
Exhibit A-11   Form of Class M-8 Certificates
Exhibit A-12   Form of Class M-9 Certificates
Exhibit A-13   Form of Class B-1 Certificates
Exhibit A-14   Form of Class B-2 Certificates
Exhibit A-15   Form of Class C Certificates
Exhibit A-16   Form of Class P Certificates
Exhibit A-17   Form of Class R Certificates
Exhibit A-18   Form of Class R-X Certificates
Exhibit A-19   Form of Class R-[1][2][3][4] Interest Certificate
Exhibit B      [Reserved]
Exhibit C      Form of Assignment Agreement
Exhibit D      Mortgage Loan Schedule
Exhibit E      Request for Release
Exhibit F-1    Form of Trustee's Initial Certification
Exhibit F-2    Form of Trustee's Final Certification
Exhibit F-3    Form of Trustee's Receipt of Mortgage Notes
Exhibit G      Form of Compliance Certificate
Exhibit H      Form of Lost Note Affidavit
Exhibit I      Form of Power of Attorney
Exhibit J      Form of Investment Letter
Exhibit K      Form of Transfer Affidavit for Residual Certificates
Exhibit L      Form of Transferor Certificate
Exhibit M      Form of ERISA Representation Letter
Exhibit N-1    Form of Certification to Be Provided by the Depositor with
               Form 10-K
Exhibit N-2    Form of Certification to Be Provided to Depositor by the Trustee
Exhibit N-3    Form of Certification to Be Provided to Depositor by the Servicer
Exhibit O      Form of Cap Contract

Schedule I     Prepayment Charge Schedule


                                        v
<PAGE>


      This  Pooling  and  Servicing  Agreement  is dated as of July 1, 2004 (the
"Agreement"),   among  FINANCIAL  ASSET  SECURITIES  CORP.,  as  depositor  (the
"Depositor"),  CENTEX HOME EQUITY COMPANY, LLC, as servicer (the "Servicer") and
JPMORGAN CHASE BANK, as trustee (the "Trustee").

                             PRELIMINARY STATEMENT:

      The Depositor intends to sell pass-through certificates (collectively, the
"Certificates"),  to be  issued  hereunder  in  multiple  classes,  which in the
aggregate will evidence the entire  beneficial  ownership  interest in the Trust
Fund created  hereunder.  The  Certificates  will consist of eighteen classes of
certificates,  designated as (i) the Class A-1 Certificates,  (ii) the Class A-2
Certificates, (iii) the Class A-3 Certificates, (iv) the Class M-1 Certificates,
(v) the Class M-2 Certificates, (vi) the Class M-3 Certificates, (vii) the Class
M-4  Certificates,  (viii)  the  Class  M-5  Certificates,  (ix) the  Class  M-6
Certificates,  (x) the Class M-7 Certificates,  (xi) the Class M-8 Certificates,
(xii) the Class M-9 Certificates,  (xiii) the Class B-1 Certificates,  (xiv) the
Class  B-2  Certificates,  (xv) the  Class C  Certificates,  (xvi)  the  Class P
Certificates,  (xvii)  the  Class R  Certificates  and  (xviii)  the  Class  R-X
Certificates.


<PAGE>


                                     REMIC 1

      As  provided  herein,  the  Trustee  will  make an  election  to treat the
segregated pool of assets  consisting of the Mortgage  Loans,  and certain other
related  assets  subject  to this  Agreement  (exclusive  of the  Net  WAC  Rate
Carryover  Reserve Account,  any Servicer  Prepayment Charge Payment Amounts and
the Cap Contract) as a real estate mortgage  investment  conduit (a "REMIC") for
federal  income  tax  purposes,  and  such  segregated  pool of  assets  will be
designated as "REMIC 1." The Class R-1 Interest will represent the sole class of
"residual interests" in REMIC 1 for purposes of the REMIC Provisions (as defined
herein) under federal income tax law. The following table irrevocably sets forth
the  designation,  the  Uncertificated  REMIC 1  Pass-Through  Rate, the initial
Uncertificated Principal Balance, and solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii),  the "latest possible maturity date" for
each of the REMIC 1  Regular  Interests.  None of the REMIC 1 Regular  Interests
will be certificated.

<TABLE>
<CAPTION>
                  Uncertificated REMIC 2    Initial Uncertificated      Assumed Final
  Designation        Pass Through Rate         Principal Balance       Maturity Date(1)
-----------------------------------------------------------------------------------------
<S>                     <C>                     <C>                     <C>
     LTAA               Variable(2)             $303,207,787.88         July 25, 2034
     LTA1               Variable(2)              $ 800,000.00           July 25, 2034
     LTA2               Variable(2)             $ 1,400,000.00          July 25, 2034
     LTA3               Variable(2)              $ 321,570.00           July 25, 2034
     LTM1               Variable(2)               $ 97,460.00           July 25, 2034
     LTM2               Variable(2)               $ 88,180.00           July 25, 2034
     LTM3               Variable(2)               $ 55,690.00           July 25, 2034
     LTM4               Variable(2)               $ 47,960.00           July 25, 2034
     LTM5               Variable(2)               $ 44,860.00           July 25, 2034
     LTM6               Variable(2)               $ 44,860.00           July 25, 2034
     LTM7               Variable(2)               $ 37,130.00           July 25, 2034
     LTM8               Variable(2)               $ 32,490.00           July 25, 2034
     LTM9               Variable(2)               $ 30,940.00           July 25, 2034
     LTB1               Variable(2)               $ 30,940.00           July 25, 2034
     LTB2               Variable(2)               $ 30,940.00           July 25, 2034
     LTZZ               Variable(2)             $ 3,124,894.04          July 25, 2034
      LTP               Variable(2)                $ 100.00             July 25, 2034
</TABLE>

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


                                        2
<PAGE>


                                     REMIC 2

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

      The  following  table sets  forth (or  describes)  the Class  designation,
Pass-Through  Rate, the Original Class Certificate  Principal Balance and solely
for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii),  the
"latest possible  maturity date" for each Class of Certificates  that represents
one or more of the "regular interests" in REMIC 2 created hereunder:

<TABLE>
<CAPTION>
                           Original Class Certificate                            Assumed Final
    Class Designation           Principal Balance         Pass Through Rate     Maturity Date(1)
--------------------------------------------------------------------------------------------------
<S>                              <C>                         <C>                 <C>
Class A-1.................        $ 80,000,000.00            Variable(2)         July 25, 2034
Class A-2.................        $140,000,000.00            Variable(2)         July 25, 2034
Class A-3.................        $ 32,157,000.00            Variable(2)         July 25, 2034
Class M-1.................        $ 9,746,000.00             Variable(2)         July 25, 2034
Class M-2.................        $ 8,818,000.00             Variable(2)         July 25, 2034
Class M-3.................        $ 5,569,000.00             Variable(2)         July 25, 2034
Class M-4.................        $ 4,796,000.00             Variable(2)         July 25, 2034
Class M-5.................        $ 4,486,000.00             Variable(2)         July 25, 2034
Class M-6.................        $ 4,486,000.00             Variable(2)         July 25, 2034
Class M-7.................        $ 3,713,000.00             Variable(2)         July 25, 2034
Class M-8.................        $ 3,249,000.00             Variable(2)         July 25, 2034
Class M-9.................        $ 3,094,000.00             Variable(2)         July 25, 2034
Class B-1.................        $ 3,094,000.00             Variable(2)         July 25, 2034
Class B-2.................        $ 3,094,000.00             Variable(2)         July 25, 2034
Class C Interest..........       $ 3,093,701.92(3)           Variable(2)         July 25, 2034
Class P Interest..........           $ 100.00                   N/A(4)           July 25, 2034
</TABLE>

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


                                        3
<PAGE>


                                     REMIC 3

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

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

<TABLE>
<CAPTION>
                                                  Initial Aggregate
                                                Certificate Principal     Latest Possible
    Class Designation      Pass-Through Rate           Balance           Maturity Date(1)
--------------------------------------------------------------------------------------------
<S>                           <C>                   <C>                    <C>
  Class C Certificates        Variable(2)           $3,093,701.92          July 25, 2034
</TABLE>

---------------
(1)  Solely  for  purposes  of  Section   1.860G-1(a)(4)(iii)  of  the  Treasury
     regulations,  the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for the Class C Certificates.
(2)  The Class C Certificates  will receive 100% of amounts  received in respect
     of the Class C Interest.



                                        4
<PAGE>


                                     REMIC 4

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

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

<TABLE>
<CAPTION>
                                                    Initial Aggregate
                                                  Certificate Principal      Latest Possible
      Class Designation      Pass-Through Rate           Balance            Maturity Date(1)
-----------------------------------------------------------------------------------------------
<S>                             <C>                      <C>                  <C>
    Class P Certificates        Variable(2)              $100.00              July 25, 2034
</TABLE>

---------------
(1)  Solely  for  purposes  of  Section   1.860G-1(a)(4)(iii)  of  the  Treasury
     regulations,  the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for the Class P Certificates.
(2)  The Class P Certificates  will receive 100% of amounts  received in respect
     of the Class P Interest.



                                        5
<PAGE>


                                    ARTICLE I

                                   DEFINITIONS

      SECTION 1.01. Defined Terms.

      Whenever  used in this  Agreement  or in the  Preliminary  Statement,  the
following words and phrases,  unless the context otherwise requires,  shall have
the  meanings  specified  in  this  Article.  Unless  otherwise  specified,  all
calculations in respect of interest on the Floating Rate  Certificates  shall be
made on the basis of the actual  number of days  elapsed and a 360-day  year and
all other  calculations of interest  described herein shall be made on the basis
of a 360-day year  consisting of twelve 30-day months.  The Class P Certificates
and the Residual  Certificates  are not entitled to  distributions in respect of
interest and, accordingly, will not accrue interest.

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

      "Account": Either of the Collection Account and Distribution Account.

      "Accrual Period":  With respect to the Floating Rate Certificates and each
Distribution Date, the period commencing on the preceding  Distribution Date (or
in the case of the first such Accrual  Period,  commencing  on the Closing Date)
and ending on the day  preceding  such  Distribution  Date.  With respect to the
Class C Certificates and each Distribution Date, the calendar month prior to the
month of such Distribution Date.

      "Adjustable-Rate Mortgage Loan": A first lien Mortgage Loan which provides
at any period  during the life of such loan for the  adjustment  of the Mortgage
Rate  payable  in  respect  thereto.  The  Adjustable  Rate  Mortgage  Loans are
identified as such on the Mortgage Loan Schedule.

      "Adjusted Net Maximum  Mortgage  Rate":  With respect to any Mortgage Loan
(or the related REO Property), as of any date of determination, a per annum rate
of interest equal to the applicable Maximum Mortgage Rate for such Mortgage Loan
(or the Mortgage  Rate in the case of any  Fixed-Rate  Mortgage  Loan) as of the
first day of the month  preceding  the month in which the  related  Distribution
Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee
Rate.

      "Adjusted  Net Mortgage  Rate":  With respect to any Mortgage Loan (or the
related  REO  Property),  as of any date of  determination,  a per annum rate of
interest equal to the applicable  Mortgage Rate for such Mortgage Loan as of the
first day of the month  preceding  the month in which the  related  Distribution
Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee
Rate.

      "Adjustment  Date":  With respect to each  Adjustable-Rate  Mortgage Loan,
each  adjustment  date, on which the Mortgage Rate of such Mortgage Loan changes
pursuant to the related  Mortgage Note. The first  Adjustment Date following the
Cut-off  Date as to each  Adjustable-Rate  Mortgage  Loan  is set  forth  in the
Mortgage Loan Schedule.


                                        6
<PAGE>


      "Advance":  As to any Mortgage Loan or REO  Property,  any advance made by
the Servicer in respect of any Distribution Date pursuant to Section 4.04.

      "Advance Facility": As defined in Section 3.29 hereof.

      "Advance Facility Trustee": As defined in Section 3.29 hereof.

      "Advancing Person": As defined in Section 3.29 hereof.

      "Advance Reimbursement Amounts": As defined in Section 3.29 hereof.

      "Adverse REMIC Event": As defined in Section 9.01(f) hereof.

      "Affiliate":  With respect to any Person,  any other  Person  controlling,
controlled  by or under common  control  with such Person.  For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly,  whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled"  shall have meanings
correlative to the foregoing.

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

      "Allocated  Realized Loss Amount":  With respect to any Distribution  Date
and any Class of Mezzanine Certificates or the Class B Certificates,  the sum of
(i)  any  Realized  Losses  allocated  to such  Class  of  Certificates  on such
Distribution Date and (ii) the amount of any Allocated  Realized Loss Amount for
such Class of Certificates  remaining unpaid from the previous Distribution Date
and reduced by the amount of any Subsequent  Recoveries added to the Certificate
Principal Balance of such Class of Certificates.

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

      "Assignment  Agreement":  The Assignment and Recognition Agreement,  dated
July 29, 2004, among the Seller,  the Originator and the Depositor,  pursuant to
which certain of the Seller's rights under the Master Agreement were assigned to
the Depositor, substantially in the form attached hereto as Exhibit C.

      "Assumed Final Maturity Date": As to each Class of Certificates,  the date
set forth as such in the Preliminary Statement.

      "Available Funds":  With respect to any Distribution Date, an amount equal
to the  excess  of (i) the  sum of (a)  the  aggregate  of the  related  Monthly
Payments received on the Mortgage Loans on or prior to the related Determination
Date, (b) Net Liquidation Proceeds,  Insurance Proceeds,  Principal Prepayments,
Subsequent  Recoveries,  proceeds from repurchases of and substitutions for such
Mortgage  Loans and other  unscheduled  recoveries  of principal and interest in


                                       7
<PAGE>

respect of the Mortgage Loans received during the related Prepayment Period, (c)
the  aggregate  of any amounts  received  in respect of a related  REO  Property
withdrawn from any REO Account and deposited in the Collection  Account for such
Distribution  Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Servicer in respect of related Prepayment Interest Shortfalls for
such  Distribution  Date, (e) the aggregate of any Advances made by the Servicer
for such  Distribution  Date in respect of the Mortgage Loans, (f) the aggregate
of any related advances made by the Trustee as successor  Servicer in respect of
the Mortgage Loans for such  Distribution  Date pursuant to Section 7.02 and (g)
the amount of any  Prepayment  Charges  collected by the Servicer in  connection
with  the  full or  partial  prepayment  of any of the  Mortgage  Loans  and any
Servicer  Prepayment  Charge  Payment  Amount  over (ii) the sum of (a)  amounts
reimbursable  or  payable to the  Servicer  pursuant  to Section  3.11(a) or the
Trustee  pursuant to Section  3.11(b),  (b) amounts  deposited in the Collection
Account or the  Distribution  Account pursuant to clauses (a) through (g) above,
as the case may be, in error, (c) the amount of any Prepayment Charges collected
by the Servicer in connection with the full or partial  prepayment of any of the
Mortgage  Loans and any  Servicer  Prepayment  Charge  Payment  Amount,  (d) the
Trustee Fee payable from the  Distribution  Account pursuant to Section 8.05 and
(e) any  indemnification  payments or expense  reimbursements  made by the Trust
Fund pursuant to Section 6.03 or Section 8.05.

      "Bankruptcy  Code":  The  Bankruptcy  Reform Act of 1978  (Title 11 of the
United States Code), as amended.

      "Base Rate": For any Distribution Date and the Floating Rate Certificates,
the sum of (i) LIBOR plus (ii) the related Certificate Margin.

      "Basic Principal  Distribution  Amount":  With respect to any Distribution
Date, the excess of (i) the Principal  Remittance  Amount for such  Distribution
Date  over  (ii) the  Overcollateralization  Release  Amount,  if any,  for such
Distribution Date.

      "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 5.02 hereof). On the Closing
Date, the Floating Rate Certificates shall be Book-Entry Certificates.

      "Business Day": Any day other than a Saturday,  a Sunday or a day on which
banking or savings institutions in the State of Delaware, the State of New York,
the State of California,  or in the city in which the Corporate  Trust Office of
the Trustee is located are authorized or obligated by law or executive  order to
be closed.

      "Cap Amount":  The Cap Amount for the Floating Rate  Certificates is equal
to (i) the  aggregate  amount  received  by the  Trust  from  the  Cap  Contract
multiplied by (ii) a fraction equal to (a) the Certificate  Principal Balance of
such Class immediately prior to the applicable  Distribution Date divided by (b)
the aggregate  Certificate  Principal  Balance of the Floating Rate Certificates
immediately prior to the applicable Distribution Date.


                                       8
<PAGE>


      "Cap Contract":  The Cap Contract between Greenwich  Capital  Derivatives,
Inc.  and the  counterparty  thereunder,  assigned  to the  Trustee  pursuant to
Section 2.01, a form of which is attached hereto as Exhibit O.

      "Certificate": Any Regular Certificate or Residual Certificate.

      "Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register,  except that a Disqualified Organization
or  non-U.S.  Person  shall not be a Holder of a  Residual  Certificate  for any
purpose  hereof and,  solely for the purposes of giving any consent  pursuant to
this Agreement,  any Certificate  registered in the name of the Depositor or the
Servicer or any Affiliate  thereof shall be deemed not to be outstanding and the
Voting  Rights  to which it is  entitled  shall  not be taken  into  account  in
determining  whether the  requisite  percentage  of Voting  Rights  necessary to
effect any such  consent  has been  obtained,  except as  otherwise  provided in
Section  11.01.  The Trustee may  conclusively  rely upon a  certificate  of the
Depositor or the Servicer in  determining  whether a  Certificate  is held by an
Affiliate  thereof.  All references herein to "Holders" or  "Certificateholders"
shall reflect the rights of Certificate  Owners as they may indirectly  exercise
such rights through the Depository and participating members thereof,  except as
otherwise  specified  herein;  provided,  however,  that  the  Trustee  shall be
required to  recognize as a "Holder" or  "Certificateholder"  only the Person in
whose name a Certificate is registered in the Certificate Register.

      "Certificate  Margin":  With respect to the Class A-1 Certificates on each
Distribution  Date (A) on or prior to the Optional  Termination Date, 0.120% per
annum and (B) after the  Optional  Termination  Date,  0.240%  per  annum.  With
respect to the Class A-2 Certificates on each  Distribution Date (A) on or prior
to the Optional  Termination  Date,  0.300% per annum and (B) after the Optional
Termination  Date,  0.600% per annum. With respect to the Class A-3 Certificates
on each  Distribution  Date (A) on or prior to the  Optional  Termination  Date,
0.500% per annum and (B) after the Optional  Termination Date, 1.000% per annum.
With respect to the Class M-1 Certificates on each  Distribution  Date (A) on or
prior to the  Optional  Termination  Date,  0.600%  per  annum and (B) after the
Optional  Termination  Date,  0.900%  per annum.  With  respect to the Class M-2
Certificates  on  each  Distribution  Date  (A)  on or  prior  to  the  Optional
Termination Date, 0.650% per annum and (B) after the Optional  Termination Date,
0.975%  per  annum.   With  respect  to  the  Class  M-3  Certificates  on  each
Distribution  Date (A) on or prior to the Optional  Termination Date, 0.700% per
annum and (B) after the  Optional  Termination  Date,  1.050%  per  annum.  With
respect to the Class M-4 Certificates on each  Distribution Date (A) on or prior
to the Optional  Termination  Date,  1.100% per annum and (B) after the Optional
Termination  Date,  1.650% per annum. With respect to the Class M-5 Certificates
on each  Distribution  Date (A) on or prior to the  Optional  Termination  Date,
1.200% per annum and (B) after the Optional  Termination Date, 1.800% per annum.
With respect to the Class M-6 Certificates on each  Distribution  Date (A) on or
prior to the  Optional  Termination  Date,  1.400%  per  annum and (B) after the
Optional  Termination  Date,  2.100%  per annum.  With  respect to the Class M-7
Certificates  on  each  Distribution  Date  (A)  on or  prior  to  the  Optional
Termination Date, 1.850% per annum and (B) after the Optional  Termination Date,
2.775%  per  annum.   With  respect  to  the  Class  M-8  Certificates  on  each
Distribution  Date (A) on or prior to the Optional  Termination Date, 2.000% per
annum and (B) after the  Optional  Termination  Date,  3.000%  per  annum.  With
respect to the Class M-9 Certificates on each  Distribution Date (A) on or prior
to the Optional  Termination  Date,  3.500% per annum and (B) after the Optional
Termination


                                       9
<PAGE>

Date,  5.250% per annum.  With  respect  to the Class B-1  Certificates  on each
Distribution  Date (A) on or prior to the Optional  Termination Date, 3.500% per
annum and (B) after the  Optional  Termination  Date,  5.250%  per  annum.  With
respect to the Class B-2 Certificates on each  Distribution Date (A) on or prior
to the Optional  Termination  Date,  3.500% per annum and (B) after the Optional
Termination Date, 5.250% per annum.

      "Certificate  Owner":  With respect to each  Book-Entry  Certificate,  any
beneficial owner thereof.

      "Certificate  Principal  Balance":  With  respect  to any Class of Regular
Certificates  (other  than the Class C  Certificates)  immediately  prior to any
Distribution  Date  plus any  Subsequent  Recoveries  added  to the  Certificate
Principal Balance of such Certificate pursuant to Section 4.01, will be equal to
the Initial Certificate  Principal Balance thereof reduced by (A) the sum of all
amounts  actually  distributed  in respect of principal of such Class and (B) in
the case of a Mezzanine  Certificate  or Class B  Certificate,  Realized  Losses
allocated thereto on all prior  Distribution  Dates. With respect to the Class C
Certificates as of any date of determination,  an amount equal to the excess, if
any, of (A) the then aggregate  Uncertificated Principal Balances of the REMIC 1
Regular Interests over (B) the then aggregate  Certificate  Principal Balance of
the Floating Rate Certificates and the Class P Certificates then outstanding.

      "Certificate   Register"  and   "Certificate   Registrar":   The  register
maintained and registrar appointed pursuant to Section 5.02 hereof.

      "Certification": As defined in Section 3.22(b)(ii).

      "Class":  Collectively,  Certificates  which  have  the same  priority  of
payment and bear the same class  designation  and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.

      "Class A-1 Certificate": Any one of the Class A-1 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-1,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class A-2 Certificate": Any one of the Class A-2 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-2,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class A-3 Certificate": Any one of the Class A-3 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-3,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class A Certificates":  Any Class A-1 Certificate,  Class A-2 Certificate
or Class A-3 Certificate.


                                       10
<PAGE>


      "Class B-1 Certificate": Any one of the Class B-1 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-13, representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class B-1 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal Balance of the
Class M-1 Certificates  (after taking into account the distribution of the Class
M-1  Principal  Distribution  Amount  on  such  Distribution  Date),  (iii)  the
Certificate  Principal Balance of the Class M-2 Certificates  (after taking into
account the distribution of the Class M-2 Principal  Distribution Amount on such
Distribution  Date),  (iv) the  Certificate  Principal  Balance of the Class M-3
Certificates  (after  taking  into  account  the  distribution  of the Class M-3
Principal  Distribution  Amount on such Distribution  Date), (v) the Certificate
Principal  Balance of the Class M-4 Certificates  (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date),  (vi) the  Certificate  Principal  Balance of the Class M-5  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-5  Principal
Distribution Amount on such Distribution Date), (vii) the Certificate  Principal
Balance  of  the  Class  M-6   Certificates   (after  taking  into  account  the
distribution of the Class M-6 Principal Distribution Amount on such Distribution
Date),  (viii) the Certificate  Principal  Balance of the Class M-7 Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-7  Principal
Distribution Amount on such Distribution  Date), (ix) the Certificate  Principal
Balance  of  the  Class  M-8   Certificates   (after  taking  into  account  the
distribution of the Class M-8 Principal Distribution Amount on such Distribution
Date),  (x) the  Certificate  Principal  Balance  of the Class M-9  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-9  Principal
Distribution  Amount  on  such  Distribution  Date)  and  (xi)  the  Certificate
Principal  Balance  of the  Class  B-1  Certificates  immediately  prior to such
Distribution  Date over (y) the lesser of (A) the product of (i) 96.00% and (ii)
the aggregate Stated Principal  Balance of the Mortgage Loans as of the last day
of the  related  Due  Period  (after  giving  effect to  scheduled  payments  of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled  collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal  Balance of the Mortgage Loans as
of the last day of the  related Due Period  (after  giving  effect to  scheduled
payments of principal due during the related Due Period,  to the extent received
or  advanced,  and  unscheduled  collections  of principal  received  during the
related Prepayment Period) minus the Overcollateralization Floor.

      "Class B-2 Certificate": Any one of the Class B-2 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-14, representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class B-2 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal Balance of the
Class M-1 Certificates  (after taking into account the distribution of the Class
M-1  Principal  Distribution  Amount  on  such  Distribution  Date),  (iii)  the
Certificate


                                       11
<PAGE>

Principal  Balance of the Class M-2 Certificates  (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date),  (iv) the  Certificate  Principal  Balance of the Class M-3  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-3  Principal
Distribution  Amount on such Distribution  Date), (v) the Certificate  Principal
Balance  of  the  Class  M-4   Certificates   (after  taking  into  account  the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date),  (vi) the  Certificate  Principal  Balance of the Class M-5  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-5  Principal
Distribution Amount on such Distribution Date), (vii) the Certificate  Principal
Balance  of  the  Class  M-6   Certificates   (after  taking  into  account  the
distribution of the Class M-6 Principal Distribution Amount on such Distribution
Date),  (viii) the Certificate  Principal  Balance of the Class M-7 Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-7  Principal
Distribution Amount on such Distribution  Date), (ix) the Certificate  Principal
Balance  of  the  Class  M-8   Certificates   (after  taking  into  account  the
distribution of the Class M-8 Principal Distribution Amount on such Distribution
Date),  (x) the  Certificate  Principal  Balance  of the Class M-9  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-9  Principal
Distribution Amount on such Distribution  Date), (xi) the Certificate  Principal
Balance  of  the  Class  B-1   Certificates   (after  taking  into  account  the
distribution of the Class B-1 Principal Distribution Amount on such Distribution
Date) and (xii) the Certificate  Principal Balance of the Class B-2 Certificates
immediately  prior to such  Distribution  Date  over (y) the  lesser  of (A) the
product of (i) 98.00% and (ii) the  aggregate  Stated  Principal  Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to  scheduled  payments of principal  due during the related Due Period,  to the
extent received or advanced,  and unscheduled  collections of principal received
during the related  Prepayment  Period) and (B) the aggregate  Stated  Principal
Balance  of the  Mortgage  Loans as of the last day of the  related  Due  Period
(after giving  effect to scheduled  payments of principal due during the related
Due Period, to the extent received or advanced,  and unscheduled  collections of
principal   received   during  the   related   Prepayment   Period)   minus  the
Overcollateralization Floor.

      "Class C  Certificates":  Any one of the Class C Certificates  executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-15, representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 3.

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

      "Class M-1 Certificate": Any one of the Class M-1 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-4,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-1 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such Distribution Date) and (ii) the aggregate  Certificate  Principal
Balance of the Class M-1  Certificates  immediately  prior to such  Distribution
Date over (y) the lesser of (A) the product of (i) 69.30% and (ii) the aggregate
Stated


                                       12
<PAGE>

Principal  Balance of the  Mortgage  Loans as of the last day of the related Due
Period (after  giving  effect to scheduled  payments of principal due during the
related  Due  Period,  to the  extent  received  or  advanced,  and  unscheduled
collections of principal  received during the related Prepayment Period) and (B)
the aggregate Stated Principal  Balance of the Mortgage Loans as of the last day
of the  related  Due  Period  (after  giving  effect to  scheduled  payments  of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled  collections of principal received during the related Prepayment
Period) minus the Overcollateralization Floor.

      "Class M-2 Certificate": Any one of the Class M-2 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-5,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-2 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such  Distribution  Date),  (ii) the aggregate  Certificate  Principal
Balance  of  the  Class  M-1   Certificates   (after  taking  into  account  the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate  Principal Balance of the Class M-2 Certificates
immediately  prior to such  Distribution  Date  over (y) the  lesser  of (A) the
product of (i) 75.00% and (ii) the  aggregate  Stated  Principal  Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to  scheduled  payments of principal  due during the related Due Period,  to the
extent received or advanced,  and unscheduled  collections of principal received
during the related  Prepayment  Period) and (B) the aggregate  Stated  Principal
Balance  of the  Mortgage  Loans as of the last day of the  related  Due  Period
(after giving  effect to scheduled  payments of principal due during the related
Due Period, to the extent received or advanced,  and unscheduled  collections of
principal   received   during  the   related   Prepayment   Period)   minus  the
Overcollateralization Floor.

      "Class M-3 Certificate": Any one of the Class M-3 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-6,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-3 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such  Distribution  Date),  (ii) the aggregate  Certificate  Principal
Balance  of  the  Class  M-1   Certificates   (after  taking  into  account  the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date),  (iii) the Certificate  Principal  Balance of the Class M-2  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-2  Principal
Distribution  Amount  on  such  Distribution  Date)  and  (iv)  the  Certificate
Principal  Balance  of the  Class  M-3  Certificates  immediately  prior to such
Distribution  Date over (y) the lesser of (A) the product of (i) 78.60% and (ii)
the aggregate Stated Principal  Balance of the Mortgage Loans as of the last day
of the related Due Period


                                       13
<PAGE>

(after giving  effect to scheduled  payments of principal due during the related
Due Period, to the extent received or advanced,  and unscheduled  collections of
principal  received during the related  Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after  giving  effect to scheduled  payments of principal due during
the related Due Period,  to the extent  received or  advanced,  and  unscheduled
collections of principal  received during the related  Prepayment  Period) minus
the Overcollateralization Floor.

      "Class M-4 Certificate": Any one of the Class M-4 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-7,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-4 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such  Distribution  Date),  (ii) the aggregate  Certificate  Principal
Balance  of  the  Class  M-1   Certificates   (after  taking  into  account  the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date),  (iii) the Certificate  Principal  Balance of the Class M-2  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-2  Principal
Distribution Amount on such Distribution  Date), (iv) the Certificate  Principal
Balance  of  the  Class  M-3   Certificates   (after  taking  into  account  the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate  Principal  Balance of the Class M-4  Certificates
immediately  prior to such  Distribution  Date  over (y) the  lesser  of (A) the
product of (i) 81.70% and (ii) the  aggregate  Stated  Principal  Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to  scheduled  payments of principal  due during the related Due Period,  to the
extent received or advanced,  and unscheduled  collections of principal received
during the related  Prepayment  Period) and (B) the aggregate  Stated  Principal
Balance  of the  Mortgage  Loans as of the last day of the  related  Due  Period
(after giving  effect to scheduled  payments of principal due during the related
Due Period, to the extent received or advanced,  and unscheduled  collections of
principal   received   during  the   related   Prepayment   Period)   minus  the
Overcollateralization Floor.

      "Class M-5 Certificate": Any one of the Class M-5 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-8,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-5 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such  Distribution  Date),  (ii) the aggregate  Certificate  Principal
Balance  of  the  Class  M-1   Certificates   (after  taking  into  account  the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date),  (iii) the Certificate  Principal  Balance of the Class M-2  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-2  Principal
Distribution Amount on such Distribution  Date), (iv) the Certificate  Principal
Balance  of  the  Class  M-3   Certificates   (after  taking  into  account  the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date),  (v) the  Certificate  Principal  Balance  of the Class M-4  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-4  Principal
Distribution  Amount  on  such  Distribution  Date)  and  (vi)  the  Certificate
Principal  Balance  of the  Class  M-5  Certificates  immediately  prior to such
Distribution  Date over (y) the lesser of (A) the product of (i) 84.60% and (ii)
the aggregate Stated Principal  Balance of the Mortgage Loans as of


                                       14
<PAGE>

the last day of the  related  Due  Period  (after  giving  effect  to  scheduled
payments of principal due during the related Due Period,  to the extent received
or  advanced,  and  unscheduled  collections  of principal  received  during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to  scheduled  payments of principal  due during the related Due Period,  to the
extent received or advanced,  and unscheduled  collections of principal received
during the related Prepayment Period) minus the Overcollateralization Floor.

      "Class M-6 Certificate": Any one of the Class M-6 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-9,  representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-6 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such  Distribution  Date),  (ii) the aggregate  Certificate  Principal
Balance  of  the  Class  M-1   Certificates   (after  taking  into  account  the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date),  (iii) the Certificate  Principal  Balance of the Class M-2  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-2  Principal
Distribution Amount on such Distribution  Date), (iv) the Certificate  Principal
Balance  of  the  Class  M-3   Certificates   (after  taking  into  account  the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date),  (v) the  Certificate  Principal  Balance  of the Class M-4  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-4  Principal
Distribution Amount on such Distribution  Date), (vi) the Certificate  Principal
Balance  of  the  Class  M-5   Certificates   (after  taking  into  account  the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) and (vii) the Certificate  Principal Balance of the Class M-6 Certificates
immediately  prior to such  Distribution  Date  over (y) the  lesser  of (A) the
product of (i) 87.50% and (ii) the  aggregate  Stated  Principal  Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to  scheduled  payments of principal  due during the related Due Period,  to the
extent received or advanced,  and unscheduled  collections of principal received
during the related  Prepayment  Period) and (B) the aggregate  Stated  Principal
Balance  of the  Mortgage  Loans as of the last day of the  related  Due  Period
(after giving  effect to scheduled  payments of principal due during the related
Due Period, to the extent received or advanced,  and unscheduled  collections of
principal   received   during  the   related   Prepayment   Period)   minus  the
Overcollateralization Floor.

      "Class M-7 Certificate": Any one of the Class M-6 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-10, representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-7 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such  Distribution  Date),  (ii) the aggregate  Certificate  Principal
Balance  of  the  Class  M-1   Certificates   (after  taking  into  account  the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the


                                       15
<PAGE>

Certificate  Principal Balance of the Class M-2 Certificates  (after taking into
account the distribution of the Class M-2 Principal  Distribution Amount on such
Distribution  Date),  (iv) the  Certificate  Principal  Balance of the Class M-3
Certificates  (after  taking  into  account  the  distribution  of the Class M-3
Principal  Distribution  Amount on such Distribution  Date), (v) the Certificate
Principal  Balance of the Class M-4 Certificates  (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date),  (vi) the  Certificate  Principal  Balance of the Class M-5  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-5  Principal
Distribution Amount on such Distribution Date), (vii) the Certificate  Principal
Balance  of  the  Class  M-6   Certificates   (after  taking  into  account  the
distribution of the Class M-6 Principal Distribution Amount on such Distribution
Date) and (viii) the Certificate Principal Balance of the Class M-7 Certificates
immediately  prior to such  Distribution  Date  over (y) the  lesser  of (A) the
product of (i) 89.90% and (ii) the  aggregate  Stated  Principal  Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to  scheduled  payments of principal  due during the related Due Period,  to the
extent received or advanced,  and unscheduled  collections of principal received
during the related  Prepayment  Period) and (B) the aggregate  Stated  Principal
Balance  of the  Mortgage  Loans as of the last day of the  related  Due  Period
(after giving  effect to scheduled  payments of principal due during the related
Due Period, to the extent received or advanced,  and unscheduled  collections of
principal   received   during  the   related   Prepayment   Period)   minus  the
Overcollateralization Floor.

      "Class M-8 Certificate": Any one of the Class M-6 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-11, representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-8 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such  Distribution  Date),  (ii) the aggregate  Certificate  Principal
Balance  of  the  Class  M-1   Certificates   (after  taking  into  account  the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date),  (iii) the Certificate  Principal  Balance of the Class M-2  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-2  Principal
Distribution Amount on such Distribution  Date), (iv) the Certificate  Principal
Balance  of  the  Class  M-3   Certificates   (after  taking  into  account  the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date),  (v) the  Certificate  Principal  Balance  of the Class M-4  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-4  Principal
Distribution Amount on such Distribution  Date), (vi) the Certificate  Principal
Balance  of  the  Class  M-5   Certificates   (after  taking  into  account  the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date),  (vii) the Certificate  Principal  Balance of the Class M-6  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-6  Principal
Distribution Amount on such Distribution Date), (viii) the Certificate Principal
Balance  of  the  Class  M-7   Certificates   (after  taking  into  account  the
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date) and (ix) the Certificate  Principal  Balance of the Class M-8 Certificates
immediately  prior to such  Distribution  Date  over (y) the  lesser  of (A) the
product of (i) 92.00% and (ii) the  aggregate  Stated  Principal  Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to  scheduled  payments of principal  due during the related Due Period,  to the
extent received or advanced,  and unscheduled  collections of principal received


                                       16
<PAGE>

during the related  Prepayment  Period) and (B) the aggregate  Stated  Principal
Balance  of the  Mortgage  Loans as of the last day of the  related  Due  Period
(after giving  effect to scheduled  payments of principal due during the related
Due Period, to the extent received or advanced,  and unscheduled  collections of
principal   received   during  the   related   Prepayment   Period)   minus  the
Overcollateralization Floor.

      "Class M-9 Certificate": Any one of the Class M-6 Certificates executed by
the Trustee,  and  authenticated  and  delivered by the  Certificate  Registrar,
substantially in the form annexed hereto as Exhibit A-12, representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 2.

      "Class M-9 Principal  Distribution  Amount":  The excess of (x) the sum of
(i) the  aggregate  Certificate  Principal  Balance of the Class A  Certificates
(after taking into account the distribution of the Senior Principal Distribution
Amount on such  Distribution  Date),  (ii) the aggregate  Certificate  Principal
Balance  of  the  Class  M-1   Certificates   (after  taking  into  account  the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date),  (iii) the Certificate  Principal  Balance of the Class M-2  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-2  Principal
Distribution Amount on such Distribution  Date), (iv) the Certificate  Principal
Balance  of  the  Class  M-3   Certificates   (after  taking  into  account  the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date),  (v) the  Certificate  Principal  Balance  of the Class M-4  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-4  Principal
Distribution Amount on such Distribution  Date), (vi) the Certificate  Principal
Balance  of  the  Class  M-5   Certificates   (after  taking  into  account  the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date),  (vii) the Certificate  Principal  Balance of the Class M-6  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-6  Principal
Distribution Amount on such Distribution Date), (viii) the Certificate Principal
Balance  of  the  Class  M-7   Certificates   (after  taking  into  account  the
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date),  (ix) the  Certificate  Principal  Balance of the Class M-8  Certificates
(after  taking  into  account  the  distribution  of  the  Class  M-8  Principal
Distribution Amount on such Distribution Date) and (x) the Certificate Principal
Balance of the Class M-9  Certificates  immediately  prior to such  Distribution
Date over (y) the lesser of (A) the product of (i) 94.00% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after  giving  effect to scheduled  payments of principal due during
the related Due Period,  to the extent  received or  advanced,  and  unscheduled
collections of principal  received during the related Prepayment Period) and (B)
the aggregate Stated Principal  Balance of the Mortgage Loans as of the last day
of the  related  Due  Period  (after  giving  effect to  scheduled  payments  of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled  collections of principal received during the related Prepayment
Period) minus the Overcollateralization Floor.

      "Class P Certificate": Any one of the Class P Certificates executed by the
Trustee,   and  authenticated  and  delivered  by  the  Certificate   Registrar,
substantially in the form annexed hereto as Exhibit A-16, representing the right
to  distributions  as set forth  herein and  therein  and  evidencing  a regular
interest in REMIC 4.


                                       17
<PAGE>

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

      "Class R  Certificate":  The Class R Certificate  executed by the Trustee,
and authenticated and delivered by the Certificate  Registrar,  substantially in
the form annexed  hereto as Exhibit  A-17 and  evidencing  the  ownership of the
Class R-1 Interest and the Class R-2 Interest.

      "Class  R-X  Certificate":  The  Class  R-X  Certificate  executed  by the
Trustee,   and  authenticated  and  delivered  by  the  Certificate   Registrar,
substantially  in the form  annexed  hereto as Exhibit A-18 and  evidencing  the
ownership of the Class R-3 Interest and the Class R-4 Interest.

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

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

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

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

      "Close of  Business":  As used herein,  with respect to any Business  Day,
5:00 p.m. (New York time).

      "Closing Date": July 29, 2004.

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

      "Collection  Account":  The account or accounts  created and maintained by
the Servicer  pursuant to Section 3.10(a),  which shall be entitled "Centex Home
Equity  Company,  LLC,  for  JPMorgan  Chase  Bank,  as  Trustee,  in trust  for
registered Holders of CHEC Loan Trust 2004-1, Asset-Backed Certificates,  Series
2004-1," which account must be an Eligible Account.

      "Compensating Interest": As defined in Section 3.24 hereof.

      "Corporate  Trust  Office":  The principal  corporate  trust office of the
Trustee  at which  at any  particular  time  its  corporate  trust  business  in
connection with this Agreement shall be  administered,  which office at the date
of the execution of this  instrument is located at 4 New York Plaza,  6th Floor,
New York, New York 10004-2477,  Attention:  Institutional Trust  Services/Global
Debt:  CHEC Loan  Trust-2004-1,  or at such  other  address as the  Trustee  may
designate from time to time by notice to the Certificateholders,  the Depositor,
the Servicer and the Seller.

      "Corresponding Certificate": With respect to each REMIC 1 Regular Interest
set forth below, the  corresponding  Regular  Certificate set forth in the table
below:


                                       18
<PAGE>

        REMIC 1 REGULAR INTEREST                  Regular Certificate
   -------------------------------------------------------------------------
                  LTA1                                 Class A-1
                  LTA2                                 Class A-2
                  LTA3                                 Class A-3
                  LTM1                                 Class M-1
                  LTM2                                 Class M-2
                  LTM3                                 Class M-3
                  LTM4                                 Class M-4
                  LTM5                                 Class M-5
                  LTM6                                 Class M-6
                  LTM7                                 Class M-7
                  LTM8                                 Class M-8
                  LTM9                                 Class M-9
                  LTB1                                 Class B-1
                  LTB2                                 Class B-2
                  LTP                                   Class P

      "Credit Enhancement Percentage": For any Distribution Date, the percentage
equivalent  of a fraction,  the  numerator of which is the sum of the  aggregate
Certificate  Principal  Balances  of the  Mezzanine  Certificates,  the  Class B
Certificates  and the Class C Certificates  and the  denominator of which is the
aggregate  Stated Principal  Balance of the Mortgage Loans,  calculated prior to
taking into account payments of principal on the Mortgage Loans and distribution
of the Principal  Distribution  Amount to the Holders of the  Certificates  then
entitled to distributions of principal on such Distribution Date.

      "Custodian": JPMorgan Trust Company, National Association, as custodian of
the Mortgage Files, or any successor thereto.

      "Cut-off Date": With respect to each Original Mortgage Loan, July 1, 2004.

      "Cut-off Date Principal  Balance":  With respect to any Mortgage Loan, the
unpaid Stated Principal  Balance thereof as of the Cut-off Date of such Mortgage
Loan (or as of the applicable date of  substitution  with respect to a Qualified
Substitute  Mortgage Loan),  after giving effect to scheduled payments due on or
before the Cut-off Date, whether or not received.

      "Debt Service  Reduction":  With respect to any Mortgage Loan, a reduction
in the scheduled  Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code,  except such a reduction
resulting from a Deficient Valuation.

      "Deficient  Valuation":  With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding  Stated  Principal  Balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.

      "Definitive Certificates": As defined in Section 5.02(c) hereof.

      "Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by one
or more Qualified Substitute Mortgage Loans.


                                       19
<PAGE>

      "Delinquency  Percentage":  For  any  Distribution  Date,  the  percentage
obtained by dividing  (x) the  aggregate  Stated  Principal  Balance of Mortgage
Loans that are  Delinquent 60 days or more,  that are in foreclosure or that are
REO  Properties by (y) the aggregate  Stated  Principal  Balance of the Mortgage
Loans, in each case, as of the last day of the previous calendar month.

      "Delinquent":  A Mortgage Loan is  "Delinquent" if any payment due thereon
is not made by the Mortgagor by the close of business on the related Due Date. 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.

      "Depositor":  Financial Asset Securities Corp., a Delaware corporation, or
any successor in interest.

      "Depository":  The  initial  Depository  shall  be  The  Depository  Trust
Company, whose nominee 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 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(3) of the Uniform  Commercial Code of
the State of New York.  Upon request,  the  Depository  may also be  Clearstream
Banking Luxembourg and the Euroclear System.

      "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 calendar  month in which such  Distribution  Date occurs or, if such 15th
day is not a Business Day, the Business Day immediately preceding such 15th day.

      "Directly  Operate":  With respect to any REO Property,  the furnishing or
rendering of services to the tenants  thereof,  the  management  or operation of
such REO  Property,  the  holding  of such REO  Property  primarily  for sale to
customers,  the performance of any construction  work thereon or any use of such
REO Property in a trade or business conducted by the REMIC other than through an
Independent Contractor;  provided, however, that the Trustee (or the Servicer on
behalf of the  Trustee)  shall not be  considered  to  Directly  Operate  an REO
Property  solely  because the Trustee (or the Servicer on behalf of the Trustee)
establishes rental terms,  chooses tenants,  enters into or renews leases, deals
with  taxes  and  insurance,  or  makes  decisions  as  to  repairs  or  capital
expenditures with respect to such REO Property.

      "Disqualified  Organization":  A "disqualified organization" under Section
860E of the Code, which as of the Closing Date is any of: (i) the United States,
any  state  or  political  subdivision  thereof,  any  foreign  government,  any
international  organization,  or any  agency  or  instrumentality  of any of the
foregoing, (ii) any organization (other than a cooperative described in


                                       20
<PAGE>

Section  521 of the Code)  which is exempt  from the tax imposed by Chapter 1 of
the Code unless such  organization  is subject to the tax imposed by Section 511
of the Code,  (iii) any organization  described in Section  1381(a)(2)(C) of the
Code, (iv) an "electing large partnership"  within the meaning of Section 775 of
the Code or (v) any other  Person so  designated  by the  Trustee  based upon an
Opinion of Counsel provided by nationally recognized counsel to the Trustee that
the holding of an ownership  interest in a Residual  Certificate  by such Person
may cause any REMIC formed hereunder or any Person having an ownership  interest
in any Class of Certificates (other than such Person) to incur liability for any
federal tax imposed  under the Code that would not  otherwise be imposed but for
the  transfer of an  ownership  interest  in the  Residual  Certificate  to such
Person.  A corporation will not be treated as an  instrumentality  of the United
States  or of  any  state  or  political  subdivision  thereof,  if  all  of its
activities  are subject to tax and a majority of its board of  directors  is not
selected  by  a  governmental  unit.  The  term  "United  States",  "state"  and
"international  organizations" shall have the meanings set forth in Section 7701
of the Code.

      "Distribution   Account":  The  trust  account  or  accounts  created  and
maintained  by the Trustee  pursuant to Section  3.10(b) which shall be entitled
"Distribution  Account,  JPMorgan  Chase  Bank,  as  Trustee,  in trust  for the
registered   Certificateholders   of  CHEC  Loan  Trust   2004-1,   Asset-Backed
Certificates, Series 2004-1" and which must be an Eligible Account.

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

      "Due Date": With respect to each Mortgage Loan and any Distribution  Date,
the first day of the calendar  month in which such  Distribution  Date occurs on
which the Monthly Payment for such Mortgage Loan was due (or, in the case of any
Mortgage  Loan under the terms of which the Monthly  Payment  for such  Mortgage
Loan was due on a day other than the first day of the calendar month in which


                                       21
<PAGE>


such  Distribution  Date occurs,  the day during the related Due Period on which
such Monthly Payment was due), exclusive of any days of grace.

      "Due Period": With respect to any Distribution Date, the period commencing
on the second day of the month  preceding  the 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
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 short-term unsecured debt obligations of such holding company) are
rated A-1 by S&P and P-1 by Moody's  (or  comparable  ratings if S&P and Moody's
are not the  Rating  Agencies)  at the time  any  amounts  are  held on  deposit
therein,  (ii) an account or accounts the deposits in which are fully insured by
the FDIC (to the limits established by such corporation), the uninsured deposits
in which account are otherwise  secured such that, as evidenced by an Opinion of
Counsel   delivered   to  the   Trustee   and  to  each   Rating   Agency,   the
Certificateholders  will have a claim with  respect to the funds in such account
or a perfected first priority  security  interest against such 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
with  which such  account  is  maintained,  (iii) a trust  account  or  accounts
maintained with the trust department of a federal or


                                       21
<PAGE>

state chartered  depository  institution,  national banking association or trust
company acting in its fiduciary capacity or (iv) an account otherwise acceptable
to each Rating  Agency  without  reduction or  withdrawal  of their then current
ratings of the  Certificates as evidenced by a letter from each Rating Agency to
the Trustee. Eligible Accounts may bear interest.

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

      "Escrow Account":  The account or accounts created and maintained pursuant
to Section 3.09.

      "Escrow  Payments":   The  amounts   constituting   ground  rents,  taxes,
assessments,  water rates, fire and hazard insurance premiums and other payments
required to be  escrowed by the  Mortgagor  with the  mortgagee  pursuant to any
Mortgage Loan.

      "Excess  Overcollateralized  Amount":  With respect to the  Floating  Rate
Certificates  and  any  Distribution  Date,  the  excess,  if  any,  of (i)  the
Overcollateralized  Amount for such Distribution Date, assuming that 100% of the
Principal   Remittance  Amount  is  applied  as  a  principal  payment  on  such
Distribution  Date over (ii) the  Overcollateralization  Target  Amount for such
Distribution Date.

      "Extra Principal  Distribution  Amount":  With respect to any Distribution
Date, the lesser of (x) the Monthly Interest  Distributable Amount distributable
on the Class C  Certificates  on such  Distribution  Date as reduced by Realized
Losses  allocated  thereto with respect to such  Distribution  Date  pursuant to
Section  4.08  and (y) the  Overcollateralization  Deficiency  Amount  for  such
Distribution Date.

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

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

      "Final  Recovery  Determination":  With respect to any defaulted  Mortgage
Loan or any REO Property  (other than a Mortgage Loan or REO Property  purchased
by the  Originator  or the Servicer  pursuant to or as  contemplated  by Section
2.03, 3.16(c) or 10.01), a determination made by the Servicer that all Insurance
Proceeds,  Net Liquidation  Proceeds and other payments or recoveries  which the
Servicer,  in  its  reasonable  good  faith  judgment,  expects  to  be  finally
recoverable  in respect  thereof  have been so  recovered.  The  Servicer  shall
maintain  records,  prepared  by a  Servicing  Officer,  of each Final  Recovery
Determination made thereby.

      "Fixed-Rate  Mortgage  Loan":  A first or second lien  Mortgage Loan which
provides for a fixed Mortgage Rate payable with respect thereto.  The Fixed-Rate
Mortgage Loans are identified as such on the Mortgage Loan Schedule.

      "Floating  Rate  Certificates":  The Class A  Certificates,  the Mezzanine
Certificates and the Class B Certificates.


                                       22
<PAGE>

      "Formula  Rate":  For  any   Distribution   Date  and  the  Floating  Rate
Certificates, the lesser of (i) the Base Rate and (ii) the Maximum Cap Rate.

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

      "Gross Margin":  With respect to each  Adjustable-Rate  Mortgage Loan, the
fixed  percentage  set forth in the related  Mortgage  Note that is added to the
Index  on each  Adjustment  Date in  accordance  with the  terms of the  related
Mortgage  Note used to  determine  the  Mortgage  Rate for such  Adjustable-Rate
Mortgage Loan.

      "Highest  Priority":  As of  any  date  of  determination,  the  Class  of
Mezzanine   Certificates  or  Class  B  Certificates  then  outstanding  with  a
Certificate  Principal  Balance greater than zero, with the highest priority for
payments  pursuant  to  Section  4.01,  in the  following  order  of  decreasing
priority:  Class M-1,  Class M-2,  Class M-3,  Class M-4,  Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class B-1 and Class B-2 Certificates.

      "Independent":  When used with respect to any specified  Person,  any such
Person who (a) is in fact  independent of the Depositor,  the Servicer and their
respective Affiliates, (b) does not have any direct financial interest in or any
material  indirect  financial  interest in the  Depositor or the Servicer or any
Affiliate  thereof,  and (c) is not connected with the Depositor or the Servicer
or  any  Affiliate  thereof  as an  officer,  employee,  promoter,  underwriter,
trustee,  partner,  director or Person performing similar  functions;  provided,
however,  that a Person shall not fail to be Independent of the Depositor or the
Servicer or any Affiliate  thereof  merely because such Person is the beneficial
owner of 1% or less of any class of  securities  issued by the  Depositor or the
Servicer or any Affiliate thereof, as the case may be.

      "Independent Contractor":  Either (i) any Person (other than the Servicer)
that  would be an  "independent  contractor"  with  respect to any of the REMICs
created  hereunder  within the meaning of Section  856(d)(3) of the Code if such
REMIC were a real estate  investment  trust (except that the ownership tests set
forth in that  section  shall be  considered  to be met by any Person that owns,
directly or indirectly,  35% or more of any Class of  Certificates),  so long as
each such REMIC does not  receive  or derive  any  income  from such  Person and
provided  that the  relationship  between such Person and such REMIC is at arm's
length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5),  or
(ii) any other Person  (including  the  Servicer) if the Trustee has received an
Opinion of Counsel to the effect that the taking of any action in respect of any
REO Property by such Person,  subject to any conditions therein specified,  that
is otherwise herein  contemplated to be taken by an Independent  Contractor will
not cause such REO Property to cease to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code (determined  without regard to the
exception  applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.

      "Index":  With  respect  to each  Adjustable-Rate  Mortgage  Loan and with
respect to each related  Adjustment  Date, the index as specified in the related
Mortgage Note.


                                       23
<PAGE>

      "Initial  Certificate  Principal  Balance":  With  respect to any  Regular
Certificate,  the amount designated "Initial  Certificate  Principal Balance" on
the face thereof.

      "Insurance Proceeds": Proceeds of any title policy, hazard policy or other
insurance  policy  covering a Mortgage  Loan,  to the extent such  proceeds  are
received by the  Servicer  and are not to be applied to the  restoration  of the
related  Mortgaged  Property or released to the Mortgagor in accordance with the
procedures  that the Servicer would follow in servicing  mortgage loans held for
its own account,  subject to the terms and  conditions  of the related  Mortgage
Note and Mortgage.

      "Interest   Determination   Date":  With  respect  to  the  Floating  Rate
Certificates  and each Accrual  Period,  the second LIBOR Business Day preceding
the commencement of such Accrual Period.

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

      "Late  Collections":  With  respect  to any  Mortgage  Loan,  all  amounts
received subsequent to the Determination Date immediately  following any related
Due  Period,  whether as late  payments  of  Monthly  Payments  or as  Insurance
Proceeds,  Liquidation  Proceeds or otherwise,  which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments  under the related  Mortgage and Mortgage  Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.

      "LIBOR":  With respect to each Accrual Period,  the rate determined by the
Trustee on the related  Interest  Determination  Date on the basis of the London
interbank offered rate for one-month United States dollar deposits, as such rate
appears on the  Telerate  Page  3750,  as of 11:00  a.m.  (London  time) on such
Interest Determination Date. If such rate does not appear on Telerate Page 3750,
the rate for such Interest Determination Date will be determined on the basis of
the offered  rates of the  Reference  Banks for  one-month  United States dollar
deposits,  as of 11:00 a.m. (London time) on such Interest  Determination  Date.
The Trustee will request the  principal  London  office of each of the Reference
Banks to provide a quotation of its rate. On such Interest  Determination  Date,
LIBOR for the  related  Accrual  Period  will be  established  by the Trustee as
follows:

            (i) If on such  Interest  Determination  Date two or more  Reference
      Banks  provide  such  offered  quotations,  LIBOR for the related  Accrual
      Period shall be the arithmetic  mean of such offered  quotations  (rounded
      upwards if necessary to the nearest whole multiple of 1/16 of 1%); and

            (ii) If on such Interest Determination Date fewer than two Reference
      Banks  provide  such  offered  quotations,  LIBOR for the related  Accrual
      Period  shall be the  higher of (i) LIBOR as  determined  on the  previous
      Interest Determination Date and (ii) the Reserve Interest Rate.

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


                                       24
<PAGE>

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

      "Liquidation  Event":  With  respect  to  any  Mortgage  Loan,  any of the
following events:  (i) such Mortgage Loan is paid in full, (ii) a Final Recovery
Determination  is made as to such  Mortgage  Loan or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being  purchased,  sold or replaced
pursuant  to or as  contemplated  by Section  2.03,  Section  3.16(c) or Section
10.01. With respect to any REO Property,  either of the following events:  (i) a
Final  Recovery  Determination  is made as to such REO Property or (ii) such REO
Property is removed from the Trust Fund by reason of its being sold or purchased
pursuant to Section 3.23 or Section 10.01.

      "Liquidation Proceeds": The amount (other than amounts received in respect
of the rental of any REO  Property  prior to REO  Disposition)  received  by the
Servicer  in  connection  with (i) the  taking  of all or a part of a  Mortgaged
Property by exercise of the power of eminent  domain or  condemnation,  (ii) the
liquidation  of  a  defaulted  Mortgage  Loan  by  means  of a  trustee's  sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.16(c), Section 3.23 or Section 10.01.

      "Loan-to-Value  Ratio":  As of any date and as to any Mortgage  Loan,  the
fraction,  expressed  as a  percentage,  the  numerator  of which is the  Stated
Principal Balance of the Mortgage Loan and the denominator of which is the Value
of the related Mortgaged Property.

      "Losses": As defined in Section 9.03.

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

      "Majority  Certificateholders":  The Holders of Certificates evidencing at
least 51% of the Voting Rights.

      "Marker Rate":  With respect to the Class C Interest and any  Distribution
Date,  a per  annum  rate  equal to two (2) times the  weighted  average  of the
Uncertificated  REMIC 1  Pass-Through  Rates for REMIC 1 Regular  Interest LTA1,
REMIC 1 Regular  Interest LTA2,  REMIC 1 Regular  Interest LTA3, REMIC 1 Regular
Interest LTM1,  REMIC 1 Regular  Interest LTM2,  REMIC 1 Regular  Interest LTM3,
REMIC 1 Regular  Interest LTM4,  REMIC 1 Regular  Interest LTM5, REMIC 1 Regular
Interest LTM6,  REMIC 1 Regular  Interest LTM7,  REMIC 1 Regular  Interest LTM8,
REMIC 1 Regular  Interest LTM9,  REMIC 1 Regular  Interest LTB1, REMIC 1 Regular
Interest  LTB2 and REMIC 1  Regular  Interest  LTZZ,  with the rate on each such
REMIC 1 Regular Interest (other than REMIC 1 Regular Interest LTZZ) subject to a
cap  equal to the  lesser  of (i)


                                       25
<PAGE>

LIBOR plus the Certificate Margin for the Corresponding Certificate and (ii) the
related Net WAC Rate for the purpose of this  calculation;  and with the rate on
REMIC 1 Regular  Interest  LTZZ subject to a cap of zero for the purpose of this
calculation;  provided,  however,  that for this  purpose,  calculations  of the
Uncertificated  REMIC 1  Pass-Through  Rate and the related caps with respect to
each such REMIC 1 Regular  Interest  (other than REMIC 1 Regular  Interest LTZZ)
shall be multiplied  by a fraction,  the numerator of which is the actual number
of days elapsed in the related  Accrual  Period and the  denominator of which is
30.

      "Master  Agreement":   The  Master  Mortgage  Loan  Purchase  and  Interim
Servicing  Agreement,  dated June 1, 2004, among Harwood Street Funding II, LLC,
the Originator and the Seller.

      "Maximum  Cap  Rate":  For any  Distribution  Date and the  Floating  Rate
Certificates,  a per annum rate equal to the product of (x) the weighted average
of the Adjusted Net Maximum  Mortgage Rates of the Mortgage  Loans,  weighted on
the basis of the outstanding  Stated Principal Balances of the Mortgage Loans as
of the first day of the month preceding the month of such  Distribution Date and
(y) a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Accrual Period.

      "Maximum Uncertificated Accrued Interest Deferral Amount": With respect to
any Distribution  Date, the excess of (a) accrued interest at the Uncertificated
REMIC 1 Pass-Through  Rate applicable to REMIC 1 Regular  Interest LTZZ for such
Distribution Date on a balance equal to the Uncertificated  Principal Balance of
REMIC 1 Regular Interest LTZZ minus the REMIC 1 Overcollateralization Amount, in
each case for such  Distribution  Date,  over (b) the sum of the  Uncertificated
Accrued  Interest on REMIC 1 Regular  Interest  LTA1,  REMIC 1 Regular  Interest
LTA2,  REMIC 1 Regular  Interest LTA3,  REMIC 1 Regular  Interest LTM1,  REMIC 1
Regular  Interest LTM2,  REMIC 1 Regular Interest LTM3, REMIC 1 Regular Interest
LTM4,  REMIC 1 Regular  Interest LTM5,  REMIC 1 Regular  Interest LTM6,  REMIC 1
Regular  Interest LTM7,  REMIC 1 Regular Interest LTM8, REMIC 1 Regular Interest
LTM9,  REMIC 1 Regular  Interest LTB1 and REMIC 1 Regular Interest LTB2 with the
rate on each such REMIC 1 Regular  Interest subject to a cap equal to the lesser
of  (i)  LIBOR  plus  the  related  Certificate  Margin  for  the  Corresponding
Certificate  and  (ii)  the  related  Net  WAC  Rate  for  the  purpose  of this
calculation;  provided,  however,  that for this  purpose,  calculations  of the
Uncertificated  REMIC 1  Pass-Through  Rate and the related caps with respect to
each such  REMIC 1 Regular  Interest  shall be  multiplied  by a  fraction,  the
numerator of which is the actual  number of days elapsed in the related  Accrual
Period and the denominator of which is 30.

      "Maximum  Mortgage Rate":  With respect to each  Adjustable-Rate  Mortgage
Loan,  the  percentage  set forth in the  related  Mortgage  Note as the maximum
Mortgage Rate thereunder.

      "Mezzanine Certificate": Any Class M-1 Certificate, Class M-2 Certificate,
Class M-3 Certificate,  Class M-4 Certificate,  Class M-5 Certificate, Class M-6
Certificate,   Class  M-7  Certificate,  Class  M-8  Certificate  or  Class  M-9
Certificate.

      "Minimum  Mortgage Rate":  With respect to each  Adjustable-Rate  Mortgage
Loan,  the  percentage  set forth in the  related  Mortgage  Note as the minimum
Mortgage Rate thereunder.


                                       26
<PAGE>

      "Monthly Interest Distributable Amount": With respect to the Floating Rate
Certificates and the Class C Certificates and any Distribution  Date, the amount
of  interest   accrued  during  the  related   Accrual  Period  at  the  related
Pass-Through  Rate on the Certificate  Principal  Balance (or Notional Amount in
the case of the Class C Certificates)  of such Class  immediately  prior to such
Distribution  Date,  in  each  case,  reduced  by any  Net  Prepayment  Interest
Shortfalls  and Relief Act Interest  Shortfalls  (allocated to such  Certificate
based  on its  respective  entitlements  to  interest  irrespective  of any  Net
Prepayment  Interest  Shortfalls  and Relief Act  Interest  Shortfalls  for such
Distribution Date).

      "Monthly  Payment":  With  respect to any  Mortgage  Loan,  the  scheduled
monthly payment of principal and interest 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 Servicer  pursuant to Section 3.07; and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.

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

      "Mortgage":  The mortgage,  deed of trust or other  instrument  creating a
first or second lien on, or first or second  priority  security  interest  in, a
Mortgaged Property securing a Mortgage Note.

      "Mortgage File": The mortgage  documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional  documents required to be added
to the Mortgage File pursuant to this Agreement.

      "Mortgage  Loan":  Each  mortgage  loan  transferred  and  assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund,  the Mortgage  Loans so held being  identified  in the
Mortgage Loan Schedule.

      "Mortgage  Loan  Schedule":  As of any date,  the list of  Mortgage  Loans
included  in REMIC 1 on such date,  attached  hereto as Exhibit D. The  Mortgage
Loan  Schedule  shall be  prepared  by the  Depositor  and  shall  set forth the
following information with respect to each Mortgage Loan, as applicable:

            (1) the Mortgage Loan identifying number;

            (2) the Mortgagor's name;

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

            (4) a code indicating whether the Mortgaged Property was represented
      by the borrower, at the time of origination, as being owner-occupied;


                                       27
<PAGE>

            (5) the type of  Residential  Dwelling  constituting  the  Mortgaged
      Property;

            (6) the original months to maturity;

            (7) the stated  remaining  months to maturity  from the Cut-off Date
      based on the original amortization schedule;

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

            (9) the Mortgage  Rate in effect  immediately  following the Cut-off
      Date;

            (10) the date on which  the  first  Monthly  Payment  was due on the
      Mortgage Loan;

            (11) the stated maturity date;

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

            (13) the  amount of the  Monthly  Payment  due on the first Due Date
      after the Cut-off Date;

            (14)  the last Due Date on  which a  Monthly  Payment  was  actually
      applied to the unpaid Stated Principal Balance;

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

            (16) the Stated  Principal  Balance of the  Mortgage  Loan as of the
      Close of Business on the Cut-off Date;

            (17) a code  indicating  the  purpose of the  Mortgage  Loan  (i.e.,
      purchase financing, rate/term refinancing, cash-out refinancing);

            (18) the Mortgage Rate at origination;

            (19)  a  code  indicating  the  documentation  program  (i.e.,  full
      documentation,   limited  income  verification,  no  income  verification,
      alternative income verification);

            (20) the risk grade;

            (21) the Value of the Mortgaged Property;

            (22) the sale price of the Mortgaged Property, if applicable;

            (23) the actual unpaid Principal  Balance of the Mortgage Loan as of
      the Cut-off Date;

            (24) the type and term of the related Prepayment Charge;


                                       28
<PAGE>

            (25) with respect to any Adjustable-Rate Mortgage Loan, the rounding
      code,  the minimum  Mortgage  Rate,  the maximum  Mortgage Rate, the Gross
      Margin, the next Adjustment Date and the Periodic Rate Cap; and

            (26) the program code.

      The Mortgage Loan Schedule shall set forth the following information, with
respect to the Mortgage Loans as of the Cut-off Date: (1) the number of Mortgage
Loans  (separately  identifying the number of Fixed-Rate  Mortgage Loans and the
number of  Adjustable-Rate  Mortgage  Loans);  (2) the current Stated  Principal
Balance of the Mortgage  Loans;  (3) the weighted  average  Mortgage Rate of the
Mortgage  Loans and (4) the weighted  average  remaining term to maturity of the
Mortgage Loans. The Mortgage Loan Schedule shall be amended from time to time by
the Servicer in accordance with the provisions of this  Agreement.  With respect
to any  Qualified  Substitute  Mortgage  Loan,  Cut-off  Date shall refer to the
related  Cut-off Date for such Mortgage Loan,  determined in accordance with the
definition of Cut-off Date herein.

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

      "Mortgage Pool": The pool of Mortgage Loans,  identified on Exhibit D from
time to time, and any REO Properties acquired in respect thereof.

      "Mortgage Rate":  With respect to each Fixed-Rate  Mortgage Loan, the rate
set forth in the related  Mortgage  Note.  With respect to each  Adjustable-Rate
Mortgage Loan,  the annual rate at which interest  accrues on such Mortgage Loan
from time to time in  accordance  with the  provisions  of the related  Mortgage
Note, which rate (A) as of any date of determination  until the first Adjustment
Date following the Cut-off Date shall be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Rate in effect  immediately  following the Cut-off Date
and (B) as of any date of determination thereafter shall be the rate as adjusted
on the most  recent  Adjustment  Date,  to equal  the sum,  rounded  to the next
highest or nearest  0.125% (as  provided in the  Mortgage  Note),  of the Index,
determined  as set forth in the related  Mortgage  Note,  plus the related Gross
Margin subject to the limitations  set forth in the related  Mortgage Note. With
respect to each Mortgage  Loan that becomes an REO  Property,  as of any date of
determination,  the annual rate  determined in accordance  with the  immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

      "Mortgaged  Property":  The underlying  property securing a Mortgage Loan,
including  any REO  Property,  consisting  of a fee simple estate in a parcel of
real property improved by a Residential Dwelling.

      "Mortgagor": The obligor on a Mortgage Note.

      "Net Liquidation  Proceeds":  With respect to any Liquidated Mortgage Loan
or any other disposition of related Mortgaged Property (including REO Property),
the  related  Liquidation  Proceeds  and  Insurance  Proceeds  net of  Advances,
Servicing Advances, Servicing Fees and any other


                                       29
<PAGE>

accrued and unpaid  servicing fees or ancillary  income received and retained in
connection with the liquidation of such Mortgage Loan or Mortgaged Property.

      "Net Monthly Excess Cashflow": With respect to each Distribution Date, the
sum of (a) any  Overcollateralization  Release Amount for such Distribution Date
and (b) the excess of (x) Available  Funds for such  Distribution  Date over (y)
the sum for such  Distribution  Date of (A) the Monthly  Interest  Distributable
Amounts for the Floating Rate  Certificates,  (B) the Unpaid Interest  Shortfall
Amounts for the Class A Certificates and (C) the Principal Remittance Amount.

      "Net Mortgage Rate": With respect to any Mortgage Loan (or the related REO
Property),  as of any date of determination,  a per annum rate of interest equal
to the then applicable  Mortgage Rate for such Mortgage Loan minus the Servicing
Fee Rate.

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

      "Net  WAC  Rate":  For  any  Distribution   Date  and  the  Floating  Rate
Certificates,  a per annum rate equal to the product of (x) the weighted average
of the Adjusted Net Mortgage Rates of the Mortgage Loans,  weighted on the basis
of the  outstanding  Stated  Principal  Balances of the Mortgage Loans as of the
first day of the month preceding the month of such  Distribution  Date and (y) a
fraction,  the  numerator  of  which is 30 and the  denominator  of which is the
actual number of days elapsed in the related Accrual Period.

      For federal  income tax  purposes,  the economic  equivalent  of such rate
shall be expressed as the weighted average of the REMIC 1 Pass-Through  Rates on
the  REMIC 1 Regular  Interests,  weighted  on the  basis of the  Uncertificated
Principal Balance of each such REMIC 1 Regular Interest.

      "Net WAC  Rate  Carryover  Amount":  With  respect  to the  Floating  Rate
Certificates  and any  Distribution  Date, the sum of (A) the positive excess of
(i) the  amount  of  interest  accrued  on such  Class of  Certificates  on such
Distribution  Date  calculated at the related Formula Rate, over (ii) the amount
of interest  accrued on such Class of  Certificates at the Net WAC Rate for such
Distribution  Date and (B) the Net WAC Rate  Carryover  Amount for the  previous
Distribution Date not previously paid,  together with interest thereon at a rate
equal  to the  related  Formula  Rate for such  Class of  Certificates  for such
Distribution Date and for such Accrual Period.

      "Net WAC Rate Carryover  Reserve  Account":  The account  established  and
maintained pursuant to Section 4.06.

      "New  Lease":  Any  lease of REO  Property  entered  into on behalf of the
Trust,  including  any lease  renewed or  extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.

      "Nonrecoverable Advance": Any Advance or Servicing Advance previously made
or proposed to be made in respect of a Mortgage  Loan or REO Property  that,  in
the good faith


                                       30
<PAGE>

business judgment of the Servicer,  will not be ultimately recoverable from Late
Collections, Insurance Proceeds or Liquidation Proceeds of such Mortgage Loan or
REO Property as provided herein.

      "Notional Amount": Immediately prior to any Distribution Date with respect
to the Class C Interest, the aggregate Uncertificated Principal Balance of REMIC
1 Regular Interests (other than the REMIC 1 Regular Interest LTP).

      "Officers'  Certificate":  A  certificate  signed by the  Chairman  of the
Board,  the Vice  Chairman  of the  Board,  the  President  or a vice  president
(however  denominated),  and  by the  Treasurer,  the  Secretary,  or one of the
assistant treasurers or assistant secretaries of the Servicer, the Originator or
the Depositor, as applicable.

      "Opinion  of  Counsel":  A written  opinion of counsel,  who may,  without
limitation, be a salaried counsel for the Depositor or the Servicer,  acceptable
to the  Trustee,  except  that  any  opinion  of  counsel  relating  to (a)  the
qualification  of  any  REMIC  as a  REMIC  or (b)  compliance  with  the  REMIC
Provisions must be an opinion of Independent counsel.

      "Optional  Termination  Date":  The first  Distribution  Date on which the
Terminator may opt to terminate the Trust Fund pursuant to Section 10.01.

      "Original  Class  Certificate  Principal  Balance":  With  respect  to the
Floating  Rate   Certificates,   the  Class  C  Certificates  and  the  Class  P
Certificates,  the corresponding  amounts set forth opposite such Class above in
the Preliminary Statement.

      "Original  Mortgage Loan": Any of the Mortgage Loans included in the Trust
Fund as of the Closing  Date.  The aggregate  principal  balance of the Original
Mortgage Loans as of the Cut-off Date is equal to $309,395,801.92.

      "Original  Notional  Amount":  With  respect  to  the  Class  C  Interest,
$309,395,801.92.

      "Originator":  Centex Home Equity Company, LLC, a Delaware corporation, or
its successor in interest.

      "Overcollateralization   Deficiency   Amount":   With   respect   to   any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (assuming
that  100%  of  the  Principal  Remittance  Amount  is  applied  as a  principal
distribution on such Distribution Date).

      "Overcollateralization   Floor":   With  respect  to  the  Floating   Rate
Certificates, $1,546,979.01.

      "Overcollateralization  Release Amount":  With respect to any Distribution
Date, the lesser of (x) the Principal  Remittance  Amount for such  Distribution
Date and (y) the Excess Overcollateralized Amount.


                                       31
<PAGE>

      "Overcollateralization  Target Amount":  With respect to any  Distribution
Date, (i) prior to the Stepdown Date,  1.00% of the aggregate  Stated  Principal
Balance of the Original  Mortgage Loans as of the Cut-off Date, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect,  the greater of (A)
2.00% of the aggregate Stated Principal  Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled  collections of principal received during the related Prepayment
Period) and (B) 0.50% of the aggregate Stated Principal  Balance of the Original
Mortgage Loans as of the Cut-off Date and (iii) on or after the Stepdown Date if
a Trigger Event is in effect,  the  Overcollateralization  Target Amount for the
immediately preceding Distribution Date.  Notwithstanding the foregoing,  on and
after any Distribution Date following the reduction of the aggregate Certificate
Principal   Balance   of  the   Floating   Rate   Certificates   to  zero,   the
Overcollateralization Target Amount shall be zero..

      "Overcollateralized  Amount":  For any Distribution Date, the amount equal
to (i) the aggregate  Stated  Principal  Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled  collections of principal received during the related Prepayment
Period) minus (ii) the sum of the aggregate Certificate Principal Balance of the
Floating Rate  Certificates and the Class P Certificates as of such Distribution
Date after giving effect to distributions to be made on such Distribution Date.

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

      "Pass-Through  Rate":  With respect to the Floating Rate  Certificates and
any  Distribution  Date,  the lesser of (x) the  related  Formula  Rate for such
Distribution  Date and (y) the Net WAC Rate for  such  Distribution  Date.  With
respect  to the Class C Interest  and any  Distribution  Date,  a per annum rate
equal to the percentage equivalent of a fraction,  the numerator of which is the
sum of the amounts calculated pursuant to clauses (A) through (Q) below, and the
denominator of which is the aggregate  Uncertificated  Principal  Balance of the
REMIC 1 Regular Interests. For purposes of calculating the Pass-Through Rate for
the  Class C  Interest,  the  numerator  is  equal  to the sum of the  following
components:

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

            (B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTA1 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTA1;

            (C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTA2 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTA2;


                                       32
<PAGE>

            (D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTA3 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTA3;

            (E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM1 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM1;

            (F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM2 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM2;

            (G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM3 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM3;

            (H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM4 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM4;

            (I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM5 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM5;

            (J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM6 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM6;

            (K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM7 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM7;

            (L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM8 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM8;

            (M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTM9 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTM9;

            (N) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTB1 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTB1;


                                       33
<PAGE>

            (O) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
      Interest  LTB2 minus the Marker  Rate,  applied to an amount  equal to the
      Uncertificated Principal Balance of REMIC 1 Regular Interest LTB2;

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

            (Q) 100% of the interest on the REMIC 1 Regular Interest LTP.

      With  respect  to  the  Class  C   Certificates,   100%  of  the  interest
distributable to the Class C Interest, expressed as a per annum rate.

      "Paying Agent": Any paying agent appointed pursuant to Section 5.05.

      "Percentage  Interest":  With  respect to any  Certificate  (other  than a
Residual Certificate),  a fraction,  expressed as a percentage, the numerator of
which  is  the  Initial  Certificate   Principal  Balance  represented  by  such
Certificate  and the  denominator  of which is the  Original  Class  Certificate
Principal Balance of the related Class. With respect to a Residual  Certificate,
the portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such  Certificate;  provided,  however,  that the sum of all such
percentages for each such Class totals 100%.

      "Periodic Rate Cap":  With respect to each  Adjustable-Rate  Mortgage Loan
and any Adjustment Date therefor,  the fixed percentage set forth in the related
Mortgage  Note,  which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease  (without regard to the Maximum  Mortgage
Rate or the Minimum  Mortgage  Rate) on such  Adjustment  Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.

      "Permitted  Investments":  Any one or more of the following obligations or
securities  acquired at a purchase price of not greater than par,  regardless of
whether issued or managed by the Depositor,  the Servicer, the Trustee or any of
their  respective  Affiliates or for which an Affiliate of the Trustee serves as
an advisor:

            (i) direct  obligations  of, or obligations  fully  guaranteed as to
      timely  payment of principal  and  interest  by, the United  States or any
      agency or instrumentality thereof, provided such obligations are backed by
      the full faith and credit of the United States;

            (ii) (A) demand and time  deposits in,  certificates  of deposit of,
      bankers'  acceptances  issued by or federal  funds sold by any  depository
      institution or trust company (including the Trustee or its agent acting in
      their respective commercial capacities) incorporated under the laws of the
      United States of America or any state  thereof and subject to  supervision
      and  examination by federal and/or state  authorities,  so long as, at the
      time of such  investment  or  contractual  commitment  providing  for such
      investment,  such depository institution or trust company (or, if the only
      Rating Agency is S&P, in the case of the principal depository  institution
      in a depository  institution  holding  company,  debt  obligations  of the
      depository  institution  holding  company)  or its  ultimate  parent has a
      short-term uninsured


                                       34
<PAGE>

      debt rating in one of the two highest available ratings of Moody's and the
      highest  available rating category of Fitch and S&P and provided that each
      such  investment  has an original  maturity of no more than 365 days;  and
      provided  further  that,  if the  only  Rating  Agency  is S&P  and if the
      depository  or trust  company is a principal  subsidiary of a bank holding
      company and the debt  obligations  of such  subsidiary  are not separately
      rated,  the applicable  rating shall be that of the bank holding  company;
      and provided  further  that, if the original  maturity of such  short-term
      obligations of a domestic  branch of a foreign  depository  institution or
      trust  company  shall  exceed  30  days,  the  short-term  rating  of such
      institution  shall be A-1+ in the case of S&P if S&P is the Rating Agency;
      and (B) any other demand or time deposit or deposit which is fully insured
      by the FDIC;

            (iii) repurchase  obligations with a term not to exceed 30 days with
      respect to any  security  described  in clause (i) above and entered  into
      with a depository institution or trust company (acting as principal) rated
      F-1+ or higher by Fitch,  P-1 by Moody's  and rated A-1+ or higher by S&P,
      provided, however, that collateral transferred pursuant to such repurchase
      obligation  must be of the type described in clause (i) above and must (A)
      be valued  daily at current  market  prices  plus  accrued  interest,  (B)
      pursuant to such  valuation,  be equal,  at all times, to 105% of the cash
      transferred  by the Trustee in  exchange  for such  collateral  and (C) be
      delivered to the Trustee or, if the Trustee is supplying  the  collateral,
      an agent for the Trustee, in such a manner as to accomplish  perfection of
      a security  interest  in the  collateral  by  possession  of  certificated
      securities;

            (iv)  securities  bearing  interest  or sold at a discount  that are
      issued by any corporation incorporated under the laws of the United States
      of America or any State  thereof and that are rated by a Rating  Agency in
      its  highest  long-term  unsecured  rating  category  at the  time of such
      investment or contractual commitment providing for such investment;

            (v) commercial paper (including both  non-interest-bearing  discount
      obligations  and  interest-bearing  obligations  payable on demand or on a
      specified  date  not  more  than 30 days  after  the  date of  acquisition
      thereof)  that is rated  by a  Rating  Agency  in its  highest  short-term
      unsecured debt rating available at the time of such investment;

            (vi) units of money market funds, including those money market funds
      managed or advised by the Trustee or its Affiliates,  that have been rated
      "AAA" by Fitch (if rated by Fitch), "Aaa" by Moody's and "AAA" by S&P; and

            (vii) if previously  confirmed in writing to the Trustee,  any other
      demand, money market or time deposit, or any other obligation, security or
      investment,  as may be acceptable  to the Rating  Agencies in writing as a
      permitted investment of funds backing securities having ratings equivalent
      to its highest initial rating of the Class A Certificates;

provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest  with respect to the  obligations  underlying  such
instrument or (b) both principal and interest  payments derived from obligations
underlying such instrument and the interest and principal  payments with respect
to such  instrument  provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.


                                       35
<PAGE>

      "Permitted  Transferee":  Any transferee of a Residual  Certificate  other
than a Disqualified Organization or a non-U.S. Person.

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

      "Plan":  Any employee  benefit plan or certain other  retirement plans and
arrangements,  including  individual  retirement  accounts and annuities,  Keogh
plans and bank  collective  investment  funds and insurance  company  general or
separate  accounts in which such plans,  accounts or arrangements  are invested,
that are subject to ERISA or Section 4975 of the Code.

      "Pool  Balance":  As of any date of  determination,  the aggregate  Stated
Principal Balance of the Mortgage Loans in the Mortgage Pool as of such date.

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

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

      "Prepayment  Charge  Schedule":  As of any  date,  the list of  Prepayment
Charges on the Mortgage Loans included in the Trust Fund on such date,  attached
hereto as Schedule I (including the Prepayment Charge Summary attached thereto).
The Prepayment  Charge Schedule shall set 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 Stated Principal Balance of the related Mortgage Loan as of
      the Cut-off Date.

      "Prepayment  Interest Excess":  With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full on the
first day of the  calendar  month in which such  Distribution  Date  occurs,  an
amount equal to interest (to the extent received) at the applicable Net Mortgage
Rate  on the  amount  of  such  Principal  Prepayment  for  the  number  of days
commencing  on the first day of the  calendar  month in which such  Distribution
Date occurs and ending on the date on which such prepayment is so applied.


                                       36
<PAGE>

      "Prepayment  Interest  Shortfall":  With respect to any Distribution Date,
for each  Mortgage  Loan that was the subject of a Principal  Prepayment in full
during the portion of the related Prepayment Period occurring from the first day
of the related  Prepayment  Period  through the last day of the  calendar  month
preceding the month in which such  Distribution  Date occurs, an amount equal to
interest  on the  amount of such  Principal  Prepayment  for the  number of days
commencing on the date such  Principal  Prepayment was applied and ending on the
last day of the calendar  month  preceding the month in which such  Distribution
Date occurs.

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

      "Principal  Balance":  As to any  Mortgage  Loan other  than a  Liquidated
Mortgage Loan, and any day, the related  Cut-off Date Principal  Balance,  minus
all collections  credited against the Cut-off Date Principal Balance of any such
Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a  Principal  Balance  equal to the  Principal  Balance of the
related Mortgage Loan as of the final recovery of related  Liquidation  Proceeds
and a Principal Balance of zero thereafter.  As to any REO Property and any day,
the Principal  Balance of the related  Mortgage Loan  immediately  prior to such
Mortgage  Loan  becoming  REO  Property  minus  any REO  Principal  Amortization
received with respect thereto on or prior to such day.

      "Principal  Distribution  Amount":  With respect to any Distribution Date,
the sum of (i) the Basic  Principal  Distribution  Amount for such  Distribution
Date and (ii) the Extra  Principal  Distribution  Amount  for such  Distribution
Date.

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

      "Principal Remittance Amount": With respect to any Distribution Date, that
portion of  Available  Funds equal to the sum of (i) each  scheduled  payment of
principal  collected or advanced on the Mortgage  Loans by the Servicer that was
due during the related Due Period, (ii) the principal portion of all partial and
full Principal  Prepayments of the Mortgage Loans applied by the Servicer during
the related  Prepayment  Period,  (iii) the principal portion of all related Net
Liquidation  Proceeds,  Insurance  Proceeds and Subsequent  Recoveries  received
during the related Prepayment  Period,  (iv) that portion of the Purchase Price,
representing  principal  of any  repurchased  Mortgage  Loan,  deposited  in the
Collection  Account  during the related  Prepayment  Period,  (v) the  principal
portion of any related  Substitution  Adjustments  deposited  in the  Collection
Account during the related  Prepayment  Period and (vi) on the Distribution Date
on which the Trust Fund is to be  terminated  pursuant  to Section  10.01,  that
portion of the Termination Price, in respect of principal.

      "Prospectus Supplement": That certain Prospectus Supplement dated July 26,
2004  relating  to the  public  offering  of the  Class A  Certificates  and the
Mezzanine Certificates.


                                       37
<PAGE>

      "Purchase  Price":  With  respect  to the Seller or the  Servicer  and any
Mortgage Loan or REO Property to be purchased  pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 10.01, and as confirmed by an Officers'
Certificate  from the party  purchasing  the Mortgage  Loan to the  Trustee,  an
amount equal to the sum of (i) 100% of the Stated  Principal  Balance thereof as
of the date of purchase (or such other price as provided in Section 10.01), (ii)
in the case of (x) a Mortgage Loan,  accrued  interest on such Stated  Principal
Balance at the applicable Mortgage Rate in effect from time to time from the Due
Date as to which  interest was last covered by a payment by the  Mortgagor or an
advance by the Servicer, which payment or advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected, and (y) an REO Property, the sum of (1)
accrued  interest on such Stated  Principal  Balance at the applicable  Mortgage
Rate in effect from time to time from the Due Date as to which interest was last
covered by a payment by the Mortgagor or an advance by the Servicer  through the
end of the calendar month immediately preceding the calendar month in which such
REO Property was acquired,  plus (2) REO Imputed  Interest for such REO Property
for each calendar  month  commencing  with the calendar  month in which such REO
Property was acquired and ending with the calendar  month in which such purchase
is to be  effected,  net of  the  total  of all  net  rental  income,  Insurance
Proceeds,  Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed  Interest  pursuant to Section 4.04,
(iii) any unreimbursed  Servicing Advances and Advances and any unpaid Servicing
Fees  allocable  to  such  Mortgage  Loan  or REO  Property,  (iv)  any  amounts
previously  withdrawn  from the  Collection  Account in respect of such Mortgage
Loan or REO Property  pursuant to Section 3.23 and (v) in the case of a Mortgage
Loan  required to be purchased  pursuant to Section  2.03,  expenses  reasonably
incurred  or to be  incurred  by the  Servicer  or the Trustee in respect of the
breach or defect giving rise to the purchase obligation, including any costs and
damages incurred by the Trust Fund in connection with any violation by such loan
of any predatory or abusive  lending law. With respect to the Originator and any
Mortgage Loan or REO Property to be purchased  pursuant to or as contemplated by
Section 2.03 or 10.01, and as confirmed by a certificate of a Servicing  Officer
to the Trustee, an amount equal to the amount set forth pursuant to the terms of
the Master Agreement.

      "Qualified Insurer": Any insurance company acceptable to Fannie Mae.

      "Qualified  Substitute  Mortgage  Loan":  With  respect to the  Seller,  a
mortgage loan  substituted for a Deleted  Mortgage Loan pursuant to the terms of
this Agreement or the Mortgage Loan Purchase  Agreement  which must, on the date
of such  substitution,  (i) have an outstanding  Stated Principal Balance (or in
the case of a substitution of more than one mortgage loan for a Deleted Mortgage
Loan, an aggregate Stated Principal Balance), after application of all scheduled
payments  of  principal  and  interest  due  during  or  prior  to the  month of
substitution,  not in excess of, and not more than 5% less than, the outstanding
Stated Principal  Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution  occurs,  (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted  Mortgage Loan, (iii) if the Qualified  Substitute  Mortgage
Loan is an Adjustable-Rate  Mortgage Loan, have a Maximum Mortgage Rate not less
than  the  Maximum  Mortgage  Rate on the  Deleted  Mortgage  Loan,  (iv) if the
Qualified  Substitute Mortgage Loan is an Adjustable-Rate  Mortgage Loan, have a
Minimum  Mortgage  Rate not less than the Minimum  Mortgage  Rate of the Deleted
Mortgage   Loan,   (v)  if  the  Qualified   Substitute   Mortgage  Loan  is  an
Adjustable-Rate  Mortgage Loan, have a Gross Margin equal to or greater than the
Gross Margin of the Deleted


                                       38
<PAGE>

Mortgage  Loan,   (vi)  if  the  Qualified   Substitute   Mortgage  Loan  is  an
Adjustable-Rate  Mortgage Loan,  have a next  Adjustment  Date not more than two
months later than the next Adjustment Date on the Deleted  Mortgage Loan,  (vii)
[reserved],  (viii) have a remaining  term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan, (ix) be current
as of the date of substitution, (x) have a Loan-to-Value Ratio as of the date of
substitution  equal to or lower  than the Loan-  to-Value  Ratio of the  Deleted
Mortgage  Loan as of such  date,  (xi)  have a risk  grading  determined  by the
Originator at least equal to the risk grading  assigned on the Deleted  Mortgage
Loan,  (xii) have been  underwritten  or  reunderwritten  by the  Originator  in
accordance  with the same  underwriting  criteria and  guidelines as the Deleted
Mortgage Loan,  (xiii) [reserved] and (xiv) conform to each  representation  and
warranty  assigned  to  the  Depositor  pursuant  to  the  Assignment  Agreement
applicable to the Deleted  Mortgage Loan. In the event that one or more mortgage
loans are  substituted  for one or more  Deleted  Mortgage  Loans,  the  amounts
described  in clause (i) hereof  shall be  determined  on the basis of aggregate
Stated Principal Balances,  the Mortgage Rates described in clauses (ii) through
(vi) hereof shall be satisfied  for each such mortgage  loan,  the risk gradings
described in clause (x) hereof shall be satisfied as to each such mortgage loan,
the terms  described in clause (viii) hereof shall be determined on the basis of
weighted average remaining term to maturity (provided that no such mortgage loan
may have a remaining term to maturity  longer than the Deleted  Mortgage  Loan),
the Loan-to-Value Ratios described in clause (x) hereof shall be satisfied as to
each such mortgage  loan and,  except to the extent  otherwise  provided in this
sentence,  the representations  and warranties  described in clause (xiv) hereof
must  be  satisfied  as to each  Qualified  Substitute  Mortgage  Loan or in the
aggregate,  as the case may be. With respect to the Originator,  a mortgage loan
substituted  for a Deleted  Mortgage  Loan  pursuant  to the terms of the Master
Agreement which must, on the date of such substitution  conform to the terms set
forth in the Master Agreement.

      "Rating Agency or Rating  Agencies":  Moody's and S&P or their successors.
If such  agencies  or their  successors  are no  longer  in  existence,  "Rating
Agencies" shall be such nationally  recognized  statistical rating agencies,  or
other  comparable  Persons,   designated  by  the  Depositor,  notice  of  which
designation shall be given to the Trustee and Servicer.

      "Realized Loss": With respect to any Liquidated  Mortgage Loan, the amount
of loss realized equal to the portion of the Stated Principal  Balance remaining
unpaid  after  application  of all Net  Liquidation  Proceeds in respect of such
Mortgage Loan. If the Servicer  receives  Subsequent  Recoveries with respect to
any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage
Loan will be reduced to the extent  such  recoveries  are  applied to  principal
distributions on any Distribution Date.

      "Record Date":  With respect to (i) the Class P Certificates,  the Class C
Certificates  and the Residual  Certificates,  the Close of Business on the last
Business  Day of the  calendar  month  preceding  the month in which the related
Distribution Date occurs and (ii) the Floating Rate  Certificates,  the Close of
Business on the  Business Day  immediately  preceding  the related  Distribution
Date;   provided,   however,   that  following  the  date  on  which  Definitive
Certificates for a Floating Rate  Certificate are available  pursuant to Section
5.02,  the Record Date for such  Certificates  shall be the last Business Day of
the calendar month  preceding the month in which the related  Distribution  Date
occurs.


                                       39
<PAGE>

      "Reference  Banks":  Those banks (i) with an established place of business
in London,  England, (ii) not controlling,  under the control of or under common
control with the  Originator or the Servicer or any Affiliate  thereof and (iii)
which have been designated as such by the Trustee;  provided,  however,  that if
fewer  than two of such  banks  provide a LIBOR  rate,  then any  leading  banks
selected  by the  Trustee  which are engaged in  transactions  in United  States
dollar deposits in the international Eurocurrency market.

      "Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.

      "Regular  Certificate":  Any of the Floating  Rate  Certificates,  Class C
Certificates or Class P Certificates.

      "Reimbursement Amount": As defined in Section 3.29.

      "Relief  Act":  The  Servicemembers  Civil Relief Act, as amended,  or any
similar state or local laws.

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

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

      "REMIC 1": The segregated pool of assets subject hereto,  constituting the
primary trust created hereby and to be administered  hereunder,  with respect to
which a REMIC  election is to be made  consisting of: (i) such Mortgage Loans as
from time to time are  subject to this  Agreement,  together  with the  Mortgage
Files relating thereto,  and together with all collections  thereon and proceeds
thereof,  (ii) any REO  Property,  together  with all  collections  thereon  and
proceeds thereof,  (iii) the Trustee's rights with respect to the Mortgage Loans
under  all  insurance  policies  required  to be  maintained  pursuant  to  this
Agreement  and any  proceeds  thereof,  (iv) the  Depositor's  rights  under the
Assignment  Agreement  (including any security interest created thereby) and (v)
the Collection Account,  the Distribution  Account (subject to the last sentence
of this  definition)  and any REO Account  and such  assets  that are  deposited
therein from time to time and any investments thereof, together with any and all
income,  proceeds  and  payments  with  respect  thereto.   Notwithstanding  the
foregoing,  however,  a REMIC  election will not be made with respect to the Net
WAC Rate Carryover Reserve Account,  the Cap Contract or any Servicer Prepayment
Charge Payment Amounts.

      "REMIC  1  Interest  Loss   Allocation   Amount":   With  respect  to  any
Distribution  Date,  an amount  equal to (a) the  product  of (i) the  aggregate
Stated Principal Balance of the Mortgage


                                       40
<PAGE>

Loans and related REO Properties then  outstanding  and (ii) the  Uncertificated
REMIC 1  Pass-Through  Rate for REMIC 1 Regular  Interest  LTAA minus the Marker
Rate, divided by (b) 12.

      "REMIC   1   Overcollateralization    Target   Amount":   1.00%   of   the
Overcollateralization Target Amount.

      "REMIC  1  Overcollateralization  Amount":  With  respect  to any  date of
determination,  (i) 1.00% of the aggregate  Uncertificated  Principal Balance of
the REMIC 1 Regular  Interests  minus (ii) the  aggregate of the  Uncertificated
Principal  Balance of REMIC 1 Regular  Interest LTAA,  REMIC 1 Regular  Interest
LTA1,  REMIC 1 Regular  Interest LTA2,  REMIC 1 Regular  Interest LTA3,  REMIC 1
Regular  Interest LTM1,  REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest
LTM3,  REMIC 1 Regular  Interest LTM4,  REMIC 1 Regular  Interest LTM5,  REMIC 1
Regular  Interest LTM6,  REMIC 1 Regular Interest LTM7, REMIC 1 Regular Interest
LTM8,  REMIC 1 Regular  Interest LTM9,  REMIC 1 Regular  Interest LTB1,  REMIC 1
Regular  Interest LTB2 and REMIC 1 Regular Interest LTP, in each case as of such
date of determination.

      "REMIC  1  Principal  Loss  Allocation   Amount":   With  respect  to  any
Distribution  Date, an amount equal to the product of (i) the  aggregate  Stated
Principal  Balance  of the  Mortgage  Loans  and  related  REO  Properties  then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate  Uncertificated  Principal  Balance of REMIC 1 Regular  Interest LTA1,
REMIC 1 Regular  Interest LTA2,  REMIC 1 Regular  Interest LTA3, REMIC 1 Regular
Interest LTM1,  REMIC 1 Regular  Interest LTM2,  REMIC 1 Regular  Interest LTM3,
REMIC 1 Regular  Interest LTM4,  REMIC 1 Regular  Interest LTM5, REMIC 1 Regular
Interest LTM6,  REMIC 1 Regular  Interest LTM7,  REMIC 1 Regular  Interest LTM8,
REMIC 1 Regular Interest LTM9, REMIC 1 Regular Interest LTB1 and REMIC 1 Regular
Interest  LTB2 and the  denominator  of which  is the  aggregate  Uncertificated
Principal  Balance of REMIC 1 Regular  Interest LTA1,  REMIC 1 Regular  Interest
LTA2,  REMIC 1 Regular  Interest LTA3,  REMIC 1 Regular  Interest LTM1,  REMIC 1
Regular  Interest LTM2,  REMIC 1 Regular Interest LTM3, REMIC 1 Regular Interest
LTM4,  REMIC 1 Regular  Interest LTM5,  REMIC 1 Regular  Interest LTM6,  REMIC 1
Regular  Interest LTM7,  REMIC 1 Regular Interest LTM8, REMIC 1 Regular Interest
LTM9,  REMIC 1 Regular  Interest LTB1, REMIC 1 Regular Interest LTB2 and REMIC 1
Regular Interest LTZZ.

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

      "REMIC 1 Regular  Interest  LTA1":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTA1 shall accrue interest
at the related  Uncertificated  REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.


                                       41
<PAGE>

      "REMIC 1 Regular  Interest  LTA2":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTA2 shall accrue interest
at the related  Uncertificated  REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTA3":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTA3 shall accrue interest
at the related  Uncertificated  REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTB1":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTB1 shall accrue interest
at the related  Uncertificated  REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTB2":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTB2 shall accrue interest
at the related  Uncertificated  REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTM1":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM1 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTM2":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM2 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject


                                       42
<PAGE>

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

      "REMIC 1 Regular  Interest  LTM3":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM3 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTM4":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM4 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTM5":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM5 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTM6":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM6 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTM7":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM7 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTM8":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM8 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.

      "REMIC 1 Regular  Interest  LTM9":  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM9 shall accrue interest
at the related  Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal,  subject to the terms
and   conditions   hereof,   in  an  aggregate   amount  equal  to  its  initial
Uncertificated  Principal  Balance  as set  forth in the  Preliminary  Statement
hereto.


                                       43
<PAGE>

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

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

      "REMIC 1  Regular  Interests":  REMIC 1  Regular  Interest  LTAA,  REMIC 1
Regular  Interest LTA1,  REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest
LTA3,  REMIC 1 Regular  Interest LTM1,  REMIC 1 Regular  Interest LTM2,  REMIC 1
Regular  Interest LTM3,  Regular  Interest LTM4,  REMIC 1 Regular Interest LTM5,
REMIC 1 Regular  Interest LTM6,  REMIC 1 Regular  Interest LTM7, REMIC 1 Regular
Interest LTM8,  REMIC 1 Regular  Interest LTM9,  REMIC 1 Regular  Interest LTB1,
REMIC 1 Regular Interest LTB2, REMIC 1 Regular Interest LTZZ and REMIC 1 Regular
Interest LTP.

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

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

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

      "REMIC  Provisions":  Provisions of the federal income tax law relating to
real estate  mortgage  investment  conduits which appear at 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 Servicer and delivered to
the Trustee pursuant to Section 4.04.


                                       44
<PAGE>

      "Rents from Real Property": With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code.

      "REO  Account":  The account or  accounts  maintained  by the  Servicer in
respect of an REO Property pursuant to Section 3.23.

      "REO  Disposition":  The sale or other  disposition  of an REO Property on
behalf of the Trust Fund.

      "REO Imputed  Interest":  As to any REO Property,  for any calendar  month
during  which  such REO  Property  was at any time part of the Trust  Fund,  one
month's  interest at the  applicable  Net Mortgage Rate on the Stated  Principal
Balance of such REO Property (or, in the case of the first such calendar  month,
of the related  Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.

      "REO Principal  Amortization":  With respect to any REO Property,  for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month,  whether in the form
of rental income, sale proceeds (including,  without limitation, that portion of
the Termination  Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO
Property) or otherwise,  net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper  operation,  management and maintenance
of such REO Property or (ii) payable or reimbursable to the Servicer pursuant to
Section 3.23 for unpaid  Servicing Fees in respect of the related  Mortgage Loan
and unreimbursed Servicing Advances and Advances in respect of such REO Property
or the related  Mortgage Loan,  over (b) the REO Imputed  Interest in respect of
such REO Property for such calendar month.

      "REO Property": A Mortgaged Property acquired by the Servicer on behalf of
the Trust Fund through foreclosure or deed-in-lieu of foreclosure,  as described
in Section 3.23.

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

      "Reserve Interest Rate": With respect to any Interest  Determination Date,
the rate per annum that the Trustee  determines to be either (i) the  arithmetic
mean (rounded  upwards if necessary to the nearest whole multiple of 1/16 of 1%)
of the one-month  United States dollar  lending rates which banks in The City of
New  York  selected  by the  Depositor  are  quoting  on the  relevant  Interest
Determination  Date to the  principal  London  offices of  leading  banks in the
London  interbank  market or (ii) in the event that the Trustee can determine no
such arithmetic mean, in the case of any Interest  Determination  Date after the
initial Interest  Determination  Date, the lowest one-month United States dollar
lending rate which such New York banks  selected by the Depositor are quoting on
such Interest Determination Date to leading European banks.

      "Residential  Dwelling":   Any  one  of  the  following:  (i)  a  detached
one-family  dwelling,  (ii) a detached  two- to  four-family  dwelling,  (iii) a
one-family dwelling unit in a Fannie Mae eligible


                                       45
<PAGE>

condominium  project,  (iv) a  manufactured  home, or (v) a detached  one-family
dwelling  in a planned  unit  development,  none of which is a  co-operative  or
mobile home.

      "Residual  Certificate":  The  Class  R  Certificates  and the  Class  R-X
Certificates.

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

      "Responsible  Officer":  When used with respect to the  Trustee,  any vice
president, any assistant vice president, the Secretary, any assistant secretary,
the Treasurer,  any assistant treasurer, the Cashier, any assistant cashier, any
trust  officer or assistant  trust  officer,  the  Controller  and any assistant
controller,  in each  case,  with  direct  responsibility  for the  transactions
contemplated hereby or any other officer of the Trustee  customarily  performing
functions  similar to those  performed by any of the above  designated  officers
and,  with  respect to a  particular  matter,  to whom such  matter is  referred
because of such  officer's  knowledge  of and  familiarity  with the  particular
subject.

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

      "Seller":   Greenwich  Capital  Financial   Products,   Inc.,  a  Delaware
corporation, in its capacity as assignor under the Assignment Agreement.

      "Senior Principal  Distribution  Amount":  The excess of (x) the aggregate
Certificate  Principal Balance of the Class A Certificates  immediately prior to
such  Distribution Date over (y) the lesser of (A) the product of (i) 63.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period  (after  giving  effect to  scheduled  payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled  collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal  Balance of the Mortgage Loans as
of the last day of the  related Due Period  (after  giving  effect to  scheduled
payments of principal due during the related Due Period,  to the extent received
or  advanced,  and  unscheduled  collections  of principal  received  during the
related Prepayment Period) minus the Overcollateralization Floor.

      "Servicer":  Centex Home Equity Company, LLC, a Delaware limited liability
company, or any successor servicer appointed as herein provided, in its capacity
as Servicer hereunder.

      "Servicer Certification": As defined in Section 3.22(b) hereof.

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

      "Servicer  Prepayment  Charge Payment Amount":  The amounts payable by the
Servicer in respect of any waived Prepayment Charges pursuant to Section 2.05 or
Section 3.01.


                                       46
<PAGE>

      "Servicer  Remittance  Date":  With respect to any Distribution  Date, the
18th day of the calendar month in which the Distribution Date occurs or, if such
18th day is not a Business Day, the Business Day preceding such 18th day.

      "Servicing Advance Reimbursement Amount": As defined in Section 3.29.

      "Servicing  Advances":  All  customary,  reasonable  and necessary "out of
pocket" costs and expenses (including  reasonable  attorneys' fees and expenses)
incurred  by the  Servicer  in the  performance  of its  servicing  obligations,
including,  but not limited to, the cost of (i) the  preservation,  restoration,
inspection and  protection of the Mortgaged  Property,  (ii) any  enforcement or
judicial  proceedings,   including   foreclosures,   (iii)  the  management  and
liquidation of the REO Property and (iv) compliance  with the obligations  under
Sections 3.01, 3.09, 3.14, 3.16, and 3.23.  Servicing  Advances also include any
reasonable "out-of-pocket" costs and expenses (including legal fees) incurred by
the  Servicer  in  connection  with  executing  and  recording   instruments  of
satisfaction,  deeds of  reconveyance  or  Assignments of Mortgage in connection
with any foreclosure in respect of any Mortgage Loan to the extent not recovered
from the related  Mortgagor  or  otherwise  payable  under this  Agreement.  The
Servicer  shall not be required to make any  Servicing  Advance  that would be a
Nonrecoverable Advance.

      "Servicing  Fee":  With respect to each Mortgage Loan and for any calendar
month,  an amount equal to the  Servicing Fee Rate accrued for such month (or in
the event of any Principal  Prepayment in full made by the Mortgagor during such
month,  the  Servicing  Fee Rate  accrued for the number of days  covered by the
payment of interest  accompanying the Principal Prepayment in full), on the same
principal amount on which interest on such Mortgage Loan accrues for such month.
A portion of such  Servicing  Fee may be  retained  by any  Sub-Servicer  as its
servicing compensation.

      "Servicing Fee Rate": 0.50% per annum.

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

      "Servicing Standard": Shall mean the standards set forth in Section 3.01.

      "Servicing  Transfer Costs":  Shall mean all reasonable costs and expenses
incurred by the Trustee in  connection  with the  transfer of  servicing  from a
predecessor  servicer,  including,  without limitation,  any reasonable costs or
expenses  associated  with the complete  transfer of all servicing  data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee (or any successor servicer appointed pursuant to
Section 7.02) to service the Mortgage Loans properly and effectively.

      "Startup Day": As defined in Section 9.01(b) hereof.


                                       47
<PAGE>

      "Stated Principal  Balance":  With respect to any Mortgage Loan: (a) as of
any date of determination up to but not including the Distribution Date on which
the proceeds,  if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed,  the outstanding Stated Principal Balance of such Mortgage
Loan as of the Cut-off Date as shown in the Mortgage  Loan  Schedule,  minus the
sum of (i) the  principal  portion  of each  Monthly  Payment  due on a Due Date
subsequent  to the Cut-off  Date to the extent  received  from the  Mortgagor or
advanced by the Servicer and  distributed  pursuant to Section 4.01 on or before
such date of determination,  (ii) all Principal  Prepayments  received after the
Cut-off  Date to the extent  distributed  pursuant to Section  4.01 on or before
such  date of  determination,  (iii)  all  Liquidation  Proceeds  and  Insurance
Proceeds to the extent  distributed  pursuant to Section  4.01 on or before such
date of determination,  and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient  Valuation made during or prior to the Due Period for
the most recent  Distribution  Date  coinciding  with or preceding  such date of
determination;  and  (b) as of any  date  of  determination  coinciding  with or
subsequent  to the  Distribution  Date on  which  the  proceeds,  if  any,  of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property:  (a) as of any date of determination up to but
not  including  the  Distribution  Date on  which  the  proceeds,  if any,  of a
Liquidation  Event with respect to such REO Property  would be  distributed,  an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage  Loan as of the date on which such REO  Property was acquired on behalf
of the Trust Fund, minus the aggregate  amount of REO Principal  Amortization in
respect of such REO Property for all previously  ended calendar  months,  to the
extent  distributed  pursuant  to  Section  4.01  on  or  before  such  date  of
determination;  and  (b) as of any  date  of  determination  coinciding  with or
subsequent  to the  Distribution  Date on  which  the  proceeds,  if  any,  of a
Liquidation Event with respect to such REO Property would be distributed, zero.

      "Stepdown Date": The earlier to occur of (i) the first  Distribution  Date
on which the aggregate Certificate Principal Balance of the Class A Certificates
has been  reduced  to zero and (ii) the  later to occur of (x) the  Distribution
Date occurring in August 2007 and (y) the first  Distribution  Date on which the
Credit  Enhancement  Percentage  (calculated  for this purpose only after taking
into  account  payments  of  principal  on  the  Mortgage  Loans  but  prior  to
distribution  of the  Principal  Distribution  Amount to the  Certificates  then
entitled to distributions of principal on such Distribution Date) is equal to or
greater than 37.00%.

      "Sub-Servicer": Any Person with which the Servicer has entered into a Sub-
Servicing  Agreement  and  which  meets  the  qualifications  of a  Sub-Servicer
pursuant to Section 3.02.

      "Sub-Servicing  Account":  An account  established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise  acceptable to
the Servicer.

      "Sub-Servicing Agreement": The written contract between the Servicer and a
Sub- Servicer relating to servicing and administration of certain Mortgage Loans
as provided in Section 3.02.

      "Subsequent Recoveries":  As of any Distribution Date, amounts received by
the Servicer (net of any related expenses permitted to be reimbursed pursuant to
Section 3.11)


                                       48
<PAGE>

specifically related to a Mortgage Loan that was the subject of a liquidation or
an REO  Disposition  prior to the related  Prepayment  Period that resulted in a
Realized Loss.

      "Substitution Adjustment": As defined in Section 2.03(d) hereof.

      "Tax Matters Person": The tax matters person appointed pursuant to Section
9.01(e) hereof.

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

      "Termination Price": As defined in Section 10.01(a) hereof.

      "Terminator": As defined in Section 10.01(a) hereof.

      "Trigger  Event":  A  Trigger  Event  is in  effect  with  respect  to any
Distribution Date on or after the Stepdown Date if:

      (a) the Delinquency  Percentage  exceeds 42.00% of the Credit  Enhancement
Percentage; or

      (b) the aggregate  amount of Realized  Losses  incurred  since the Cut-off
Date  through the last day of the related Due Period  (reduced by the  aggregate
amount of Subsequent Recoveries received since the Cut-off Date through the last
day of the related Due Period) divided by the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date, exceeds the applicable percentages
set forth below with respect to such Distribution Date:


DISTRIBUTION DATE OCCURRING IN                        PERCENTAGE
-------------------------------------------------------------------------------
August 2007 through July 2008           5.75% for the first month, plus an
                                        additional 1/12th of 1.75% for each
                                        month thereafter.
August 2008 through July 2009           7.50% for the first month, plus an
                                        additional 1/12th of 1.25% for each
                                        month thereafter.
August 2009 through July 2010           8.75% for the first month, plus an
                                        additional 1/12th of 0.50% for each
                                        month thereafter.
August 2010 and thereafter              9.25% for each month.

      "Trust": CHEC Loan Trust 2004-1, the trust created hereunder.

      "Trust Fund":  All of the assets of the Trust,  which is the trust created
hereunder  consisting  of REMIC 1,  REMIC 2,  REMIC 3, REMIC 4, the Net WAC Rate
Carryover Reserve Account,  the Cap Contract and any Servicer  Prepayment Charge
Payment Amounts.


                                       49
<PAGE>

      "Trustee":  JPMorgan  Chase Bank, a New York banking  corporation,  or any
successor trustee appointed as herein provided.

      "Trustee Fee": The amount payable to the Trustee on each Distribution Date
pursuant to Section 8.05 as compensation for all services  rendered by it in the
execution of the trust hereby created and in the exercise and performance of any
of the powers and duties of the  Trustee  hereunder,  which  amount  shall equal
one-twelfth  of the product of (i) the  Trustee Fee Rate and (ii) the  aggregate
Stated  Principal  Balance of the Mortgage Loans and any REO  Properties  (after
giving  effect to  scheduled  payments of  principal  due during the related Due
Period,  to the extent  received or advanced,  and  unscheduled  collections  of
principal  received  during the related  Prepayment  Period);  provided that the
Trustee Fee shall not be less than $7,000 per annum.

      "Trustee Fee Rate": 0.0075% per annum.

      "Trustee Reimbursable  Expenses":  Any amounts reimbursable to the Trustee
pursuant to Sections 2.01,  3.06, 7.02 and 8.05 and, if the Trustee is acting as
Custodian,   any  related  custodial  fees  (including  all  attorney  fees  and
expenses).

      "Uncertificated  Accrued  Interest":  With respect to each REMIC 1 Regular
Interest on each  Distribution  Date, an amount equal to one month's interest at
the related  Uncertificated  REMIC 1 Pass-  Through  Rate on the  Uncertificated
Principal Balance of such REMIC 1 Regular Interest. In each case, Uncertificated
Accrued Interest will be reduced by any Net Prepayment  Interest  Shortfalls and
Relief Act  Interest  Shortfalls  (allocated  to such REMIC 1 Regular  Interests
based on their  respective  entitlements  to  interest  irrespective  of any Net
Prepayment  Interest  Shortfalls  and Relief Act  Interest  Shortfalls  for such
Distribution Date).

      "Uncertificated  Principal Balance":  With respect to each REMIC 1 Regular
Interest, the amount of such REMIC 1 Regular Interest outstanding as of any date
of determination.  As of the Closing Date, the Uncertificated  Principal Balance
of each  REMIC 1  Regular  Interest  shall  equal  the  amount  set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each  Distribution  Date, the  Uncertificated  Principal Balance of each REMIC 1
Regular Interest shall be reduced by all distributions of principal made on such
REMIC 1 Regular Interest on such Distribution Date pursuant to Section 4.07 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution  Date by  Realized  Losses as  provided  in Section  4.07,  and the
Uncertificated  Principal  Balance  of REMIC 1 Regular  Interest  LTZZ  shall be
increased by interest deferrals as provided in Section 4.07. With respect to the
Class C Interest as of any date of determination, an amount equal to the excess,
if any, of (A) the then aggregate  Uncertificated Principal Balance of the REMIC
1 Regular Interests over (B) the then aggregate Certificate Principal Balance of
the Floating Rate  Certificates and the Class P Certificates  then  outstanding.
The  Uncertificated  Principal Balance of each REMIC 1 Regular Interest that has
an Uncertificated Principal Balance shall never be less than zero.

      "Uncertificated  REMIC 1 Pass-Through Rate": For any Distribution Date and
each REMIC 1 Regular Interest, the weighted average of the Adjusted Net Mortgage
Rates of the Mortgage  Loans,  weighted on the basis of the  outstanding  Stated
Principal  Balances  of the  Mortgage  Loans as of the  first  day of the  month
preceding the month of such Distribution Date.


                                       50
<PAGE>

      "Uninsured  Cause":  Any cause of damage to a Mortgaged Property such that
the  complete  restoration  of such  property is not fully  reimbursable  by the
hazard insurance policies required to be maintained pursuant to Section 3.14.

      "United  States  Person" or "U.S.  Person":  A citizen or  resident of the
United  States,  a  corporation,  partnership  (or  other  entity  treated  as a
corporation  or  partnership  for United  States  federal  income tax  purposes)
created or  organized  in, or under the laws of, the  United  States,  any state
thereof,  or the District of Columbia  (except in the case of a partnership,  to
the extent provided in Treasury  regulations) provided that, for purposes solely
of the restrictions on the transfer of Residual Certificates,  no partnership or
other entity  treated as a  partnership  for United  States  federal  income tax
purposes  shall be treated as a United States Person unless all persons that own
an interest in such  partnership  either  directly or through any entity that is
not a corporation  for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which 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 trust.  The
term  "United  States"  shall have the meaning set forth in Section  7701 of the
Code or successor provisions.

      "Unpaid  Interest  Shortfall  Amount":  With respect to the Floating  Rate
Certificates  and  (i)  the  first   Distribution   Date,  zero,  and  (ii)  any
Distribution  Date after the first  Distribution  Date,  the amount,  if any, by
which (a) the sum of (1) the  Monthly  Interest  Distributable  Amount  for such
Class for the immediately  preceding  Distribution  Date and (2) the outstanding
Unpaid  Interest  Shortfall  Amount,  if any, for such Class for such  preceding
Distribution Date exceeds (b) the aggregate amount  distributed on such Class in
respect of interest  pursuant to clause (a) of this definition on such preceding
Distribution  Date,  plus interest on the amount of interest due but not paid on
the  Certificates  of such Class on such  preceding  Distribution  Date,  to the
extent permitted by law, at the Pass-Through Rate for such Class for the related
Accrual Period.

      "Value":  With respect to any  Mortgaged  Property,  the lesser of (i) the
lesser of (a) the value  thereof  as  determined  by an  appraisal  made for the
originator of the Mortgage Loan at the time of  origination of the Mortgage Loan
by an appraiser who met the minimum  requirements of Fannie Mae and Freddie Mac,
and (b) the value thereof as determined by a review  appraisal  conducted by the
Originator in the event any such review appraisal  determines an appraised value
ten percent or more lower than the value  thereof as determined by the appraisal
referred  to in clause  (i)(a)  above and (ii) the  purchase  price paid for the
related  Mortgaged  Property by the Mortgagor  with the proceeds of the Mortgage
Loan,  provided,  however, in the case of a Refinanced Mortgage Loan, such value
of the  Mortgaged  Property  is based  solely  upon the  lesser of (1) the value
determined by an appraisal made for the Originator of such  Refinanced  Mortgage
Loan at the time of origination of such Refinanced Mortgage Loan by an appraiser
who met the minimum requirements of Fannie Mae and Freddie Mac and (2) the value
thereof as determined by a review  appraisal  conducted by the Originator in the
event any such review  appraisal  determines  an appraised  value ten percent or
more lower than the value thereof as determined by the appraisal  referred to in
clause (ii)(1) above.


                                       51
<PAGE>

      "Voting  Rights":  The  portion  of  the  voting  rights  of  all  of  the
Certificates  which is allocated to any  Certificate.  At all times the Floating
Rate  Certificates  and the Class C  Certificates  shall  have 98% of the Voting
Rights  (allocated  among the Holders of the Floating Rate  Certificates and the
Class C Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates),  the Class P Certificates shall have
1% of the  Voting  Rights  and the  Residual  Certificates  shall have 1% of the
Voting Rights.  The Voting Rights allocated to any Class of Certificates  (other
than the Class P Certificates and the Residual  Certificates) shall be allocated
among  all  Holders  of  each  such  Class  in  proportion  to  the  outstanding
Certificate  Principal  Balance  of  such  Certificates  and the  Voting  Rights
allocated to the Class P  Certificates  and the Residual  Certificates  shall be
allocated  among all Holders of each such Class in  proportion  to such Holders'
respective Percentage Interest;  provided, however that when none of the Regular
Certificates are outstanding, 100% of the Voting Rights shall be allocated among
Holders of the Residual Certificates in accordance with such Holders' respective
Percentage Interests in the Certificates of such Class.

      SECTION 1.02. Accounting.

      Unless otherwise  specified  herein,  for the purpose of any definition or
calculation,  whenever amounts are required to be netted, subtracted or added or
any  distributions are taken into account such definition or calculation and any
related  definitions or calculations shall be determined without  duplication of
such functions.

      SECTION 1.03. Allocation of Certain Interest Shortfalls.

      For  purposes  of   calculating   the  amount  of  the  Monthly   Interest
Distributable  Amount  for  the  Floating  Rate  Certificates  and  the  Class C
Certificates  for any  Distribution  Date,  (1) the aggregate  amount of any Net
Prepayment  Interest  Shortfalls and any Relief Act Interest Shortfalls incurred
in respect of the Mortgage  Loans for any  Distribution  Date shall be allocated
first,  among the Class C Certificates  on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable  Pass-Through Rate on the
Notional Amount of each such  Certificate  and,  thereafter,  among the Floating
Rate  Certificates  on a PRO RATA  basis  based on,  and to the  extent  of, one
month's  interest at the then  applicable  respective  Pass-Through  Rate on the
respective  Certificate  Principal  Balance of each such Certificate and (2) the
aggregate  amount of any  Realized  Losses and Net WAC Rate  Carryover  Amounts,
incurred  for any  Distribution  Date  shall  be  allocated  among  the  Class C
Certificates  on a PRO RATA basis  based on,  and to the extent of, one  month's
interest at the then applicable Pass-Through Rate on the Notional Amount of each
such Certificate.

      For purposes of calculating the amount of Uncertificated  Accrued Interest
for the REMIC 1 Regular  Interests  for any  Distribution  Date,  the  aggregate
amount of any Net  Prepayment  Interest  Shortfalls  and any Relief Act Interest
Shortfalls  incurred in respect of the Mortgage Loans for any Distribution  Date
shall be allocated among REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest
LTA1,  REMIC 1 Regular  Interest LTA2,  REMIC 1 Regular  Interest LTA3,  REMIC 1
Regular  Interest LTM1,  REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest
LTM3,  REMIC 1 Regular  Interest LTM4,  REMIC 1 Regular  Interest LTM5,  REMIC 1
Regular  Interest LTM6,  REMIC 1 Regular Interest LTM7, REMIC 1 Regular Interest
LTM8,  REMIC 1 Regular  Interest LTM9,  REMIC 1 Regular  Interest LTB1,  REMIC 1
Regular Interest LTB2 and REMIC 1


                                       52
<PAGE>

Regular  Interest  LTZZ PRO RATA based on,  and to the  extent  of, one  month's
interest at the then applicable respective  Uncertificated REMIC 1 Pass- Through
Rate on the  respective  Uncertificated  Principal  Balance of each such REMIC 1
Regular Interest.




                                       53
<PAGE>


                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

      SECTION 2.01. Conveyance of Mortgage Loans.

      The Depositor,  concurrently with the execution and delivery hereof,  does
hereby transfer,  assign,  set over and otherwise convey in trust to the Trustee
without recourse for the benefit of the  Certificateholders all the right, title
and interest of the Depositor,  including any security  interest therein for the
benefit of the  Depositor,  in and to (i) each Mortgage  Loan  identified on the
Mortgage Loan Schedule,  including the related  Cut-off Date Principal  Balance,
all interest  accruing thereon on and after the Cut-off Date and all collections
in respect of interest and principal  due after the Cut-off Date;  (ii) property
which secured each such Mortgage Loan and which has been acquired by foreclosure
or deed in lieu of foreclosure;  (iii) its interest in any insurance policies in
respect of the Mortgage Loans; (iv) the rights of the Depositor under the Master
Agreement (as assigned to the Depositor  pursuant to the terms of the Assignment
Agreement), (v) the right to receive any amounts payable under the Cap Contract,
(vi) all other assets included or to be included in the Trust Fund and (vii) all
proceeds of any of the  foregoing.  Such  assignment  includes  all interest and
principal due and  collected by the Depositor or the Servicer  after the Cut-off
Date with respect to the Mortgage Loans.

      In  connection  with such transfer and  assignment,  the  Depositor,  does
hereby deliver to and deposit with the Trustee, or the Custodian,  the following
documents  or  instruments  with  respect  to  each  Original  Mortgage  Loan so
transferred and assigned,  the following  documents or instruments (with respect
to each Mortgage Loan, a "Mortgage File"):

            (i) the original Mortgage Note,  endorsed either (A) in blank or (B)
      in the  following  form:  "Pay to the order of  JPMorgan  Chase  Bank,  as
      Trustee,  without  recourse" or with respect to any lost Mortgage Note, an
      original Lost Note Affidavit  stating that the original  mortgage note was
      lost, misplaced or destroyed, together with a copy of the related mortgage
      note; provided,  however,  that such substitutions of Lost Note Affidavits
      for original Mortgage Notes may occur only with respect to Mortgage Loans,
      the  aggregate  Cut-off  Date  Principal  Balance of which is less than or
      equal to 1.00% of the Pool Balance as of the Cut-off Date;

            (ii) the original Mortgage with evidence of recording  thereon,  and
      the  original  recorded  power of  attorney,  if the Mortgage was executed
      pursuant to a power of attorney, with evidence of recording thereon or, if
      such  Mortgage or power of attorney has been  submitted  for recording but
      has not been returned from the applicable  public  recording  office,  has
      been lost or is not otherwise available,  a copy of such Mortgage or power
      of attorney,  as the case may be, certified to be a true and complete copy
      of the original submitted for recording;

            (iii) an original  Assignment,  in form and substance acceptable for
      recording.  The Mortgage  shall be assigned  either (A) in blank or (B) to
      "JPMorgan Chase Bank, as Trustee, without recourse";


                                       54
<PAGE>


            (iv) an  original  copy of any  intervening  assignment  of Mortgage
      showing a complete chain of assignments;

            (v) the  original or a certified  copy of lender's  title  insurance
      policy; and

            (vi)  the  original  or  copies  of each  assumption,  modification,
      written assurance or substitution agreement, if any.

      The  Depositor  herewith  also delivers to the Trustee an executed copy of
the Assignment Agreement and the Master Agreement.

      If any of the  documents  referred to in Section  2.01(ii),  (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable  public  recording  office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Depositor to deliver such documents shall be deemed to be
satisfied  upon (1)  delivery to the Trustee or the  Custodian no later than the
Closing Date, of a copy of each such document certified by the Originator in the
case of (x) above or the applicable  public  recording office in the case of (y)
above to be a true and complete  copy of the  original  that was  submitted  for
recording and (2) if such copy is certified by the  Originator,  delivery to the
Trustee or the Custodian,  promptly upon receipt  thereof of either the original
or a copy of such document  certified by the applicable  public recording office
to be a true and complete copy of the original.  If the original  lender's title
insurance  policy,  or a certified copy thereof,  was not delivered  pursuant to
Section  2.01(v) above,  the Depositor shall deliver or cause to be delivered to
the Trustee or the Custodian,  the original or a copy of a written commitment or
interim binder or preliminary  report of title issued by the title  insurance or
escrow company, with the original or a certified copy thereof to be delivered to
the Trustee or the Custodian, promptly upon receipt thereof. The Servicer or the
Depositor shall deliver or cause to be delivered to the Trustee or the Custodian
promptly  upon  receipt  thereof any other  documents  constituting  a part of a
Mortgage  File received with respect to any Mortgage  Loan,  including,  but not
limited to, any original  documents  evidencing an assumption or modification of
any Mortgage Loan.

      Upon discovery or receipt of notice of any materially  defective  document
in, or that a document is missing  from,  a Mortgage  File,  the  Trustee  shall
enforce the  obligations  of the Originator  under the Master  Agreement to cure
such defect or deliver  such  missing  document to the Trustee or the  Custodian
within 120 days.  If the  Originator  does not cure such defect or deliver  such
missing  document  within  such time  period,  the  Trustee  shall  enforce  the
obligations of the Originator under the Master Agreement to either repurchase or
substitute for such Mortgage Loan in accordance with Section 2.03.

      The Trustee  shall enforce the  obligations  of the  Originator  under the
Master  Agreement to cause the  Assignments  which were delivered in blank to be
completed and to record all Assignments  referred to in Section 2.01(iii) hereof
and, to the extent  necessary,  in Section  2.01(iv)  hereof.  The Trustee shall
enforce the obligations of the Originator  under the Master Agreement to deliver
such assignments for recording within 180 days of the Closing Date. In the event
that any such  Assignment  is lost or  returned  unrecorded  because of a defect
therein,  the Trustee shall enforce the obligations of the Originator  under the
Master Agreement to promptly have a


                                       55
<PAGE>

substitute  Assignment  prepared or have such defect cured,  as the case may be,
and thereafter cause each such Assignment to be duly recorded.

      Notwithstanding   the  foregoing,   for  administrative   convenience  and
facilitation  of servicing  and to reduce  closing  costs,  the  Assignments  of
Mortgage shall not be required to be submitted for recording  unless the Trustee
and the  Depositor  receives  written  notice that such  failure to record would
result in a withdrawal  or a  downgrading  by any Rating Agency of the rating on
any Class of Certificates; provided, however, each Assignment shall be submitted
for recording by the Originator in the manner  described above, at no expense to
the  Trust  Fund or  Trustee,  upon the  earliest  to occur of:  (i)  reasonable
direction by the Holders of Certificates  entitled to at least 25% of the Voting
Rights,  (ii) the  occurrence  of a  Servicer  Event of  Termination,  (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller and
(iv) the occurrence of a servicing transfer as described in Section 7.02 hereof.
In addition to the  foregoing,  the  Servicer  shall  cause each  Assignment  of
Mortgage to be recorded in  accordance  with  customary  servicing  practices in
order to convey,  upon foreclosure,  the title of any Mortgaged  Property to the
Trust as set forth in Section 3.23 hereof.  In the event of (i) through (iv) set
forth above,  the Trustee shall  enforce the  obligations  of the  Originator to
deliver such  Assignments for recording as provided  above,  promptly and in any
event  within 30 days  following  receipt of notice by the  Originator  from the
Trustee.  Notwithstanding the foregoing, if the Originator fails to pay the cost
of recording the  Assignments,  such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust.

      The Servicer shall forward to the Custodian original documents  evidencing
an  assumption,  modification,  consolidation  or extension of any Mortgage Loan
entered  into in  accordance  with  this  Agreement  within  two  weeks of their
execution; provided, however, that the Servicer shall provide the Custodian with
a certified true copy of any such document  submitted for recordation within two
weeks of its execution, and shall provide the original of any document submitted
for recordation or a copy of such document  certified by the appropriate  public
recording  office to be a true and complete copy of the original within 365 days
of its submission for recordation. In the event that the Servicer cannot provide
a copy of such document certified by the public recording office within such 365
day period,  the Servicer  shall deliver to the  Custodian,  within such 365 day
period,  an Officers'  Certificate  of the Servicer which shall (A) identify the
recorded  document,  (B) state that the recorded document has not been delivered
to the  Custodian due solely to a delay caused by the public  recording  office,
(C) state the amount of time  generally  required  by the  applicable  recording
office to record and return a document  submitted for recordation,  if known and
(D)  specify  the  date the  applicable  recorded  document  is  expected  to be
delivered  to the  Custodian,  and,  upon  receipt  of a copy of  such  document
certified by the public recording office, the Servicer shall immediately deliver
such document to the Custodian.  In the event the appropriate  public  recording
office will not certify as to the accuracy of such document,  the Servicer shall
deliver a copy of such document  certified by an officer of the Servicer to be a
true and complete copy of the original to the Custodian.

      The Depositor  hereby directs the Trustee to execute,  deliver and perform
its  obligations  under the Cap Contract on the Closing Date and  thereafter  on
behalf of the Holders of the Floating  Rate  Certificates.  The  Depositor,  the
Servicer and the Holders of the Floating Rate  Certificates by their  acceptance
of such Certificates acknowledge and agree that the Trustee shall


                                       56
<PAGE>

execute, deliver and perform its obligations under the Cap Contract and shall do
so solely in its capacity as Trustee of the Trust Fund and not in its individual
capacity.

      SECTION 2.02. Acceptance by Trustee.

      Subject  to the  provisions  of  Section  2.01 and  subject  to the review
described below and any exceptions  noted on the exception  report  described in
the next  paragraph  below,  the Trustee  acknowledges  receipt of the documents
referred  to in  Section  2.01  above  and  all  other  assets  included  in the
definition  of  "Trust  Fund"  and  declares  that it holds  and will  hold such
documents and the other documents  delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.

      The  Trustee  agrees to execute and  deliver  (or cause the  Custodian  to
execute  and  deliver)  to the  Depositor  and the  Servicer  on or prior to the
Closing  Date an  acknowledgment  of receipt of either (i) the related  original
Mortgage  Note or (ii) a Lost Note  Affidavit,  for each Mortgage Loan (with any
exceptions noted), substantially in the form attached as Exhibit F-3 hereto.

      The Trustee agrees, for the benefit of the Certificateholders,  to review,
or that it has reviewed  pursuant to Section 2.01 (or to cause the  Custodian to
review or that it has caused the Custodian to have  reviewed) each Mortgage File
within 45 days of the Closing Date (or,  with respect to any document  delivered
after  the  Startup  Day,  within 45 days of  receipt  and with  respect  to any
Qualified  Substitute  Mortgage  Loan,  within  45  days  after  the  assignment
thereof). The Trustee further agrees, for the benefit of the Certificateholders,
to certify to the Depositor and the Servicer in substantially  the form attached
hereto as Exhibit F-1,  within 45 days of the Closing Date (or,  with respect to
any document delivered after the Startup Day, within 45 days of receipt and with
respect to any  Qualified  Substitute  Mortgage  Loan,  within 45 days after the
assignment  thereof)  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 the exception  report  annexed  thereto as not being
covered by such certification), (i) all documents required to be delivered to it
pursuant  Section 2.01 (other than Section  2.01(vi)) of this  Agreement  and if
actually  delivered to it, the documents required to be delivered to it pursuant
to Section 2.01(vi) of this Agreement are in its possession, (ii) such documents
have been  reviewed  by it and  appear  regular on their face and relate to such
Mortgage Loan and (iii) based on its examination of the foregoing documents, the
information  set forth in the Mortgage Loan Schedule that  corresponds  to items
(1), (3), (10),  (11),  (12),  (18),  (24) and (25, but only as to Gross Margin,
Maximum  Mortgage  Rate and  Periodic  Rate Cap) of the Mortgage  Loan  Schedule
accurately  reflects  information  set forth in the Mortgage  File. It is herein
acknowledged that, in conducting such review, the Trustee (or the Custodian,  as
applicable)  is under no duty or  obligation  to inspect,  review or examine any
such documents, instruments, certificates or other papers to determine that they
are recordable or genuine, legally enforceable,  valid or binding or appropriate
for the  represented  purpose or that they have  actually  been recorded or that
they are other than what they purport to be on their face.

      No  later  than  the  first  anniversary  date of this  Agreement,  or the
following Business Day if such first anniversary date is not a Business Day, the
Trustee  shall  deliver (or cause the


                                       57
<PAGE>

Custodian to deliver) to the Depositor and the Servicer a final certification in
the form annexed  hereto as Exhibit F-2, with any  applicable  exceptions  noted
thereon.

      If in the process of reviewing the Mortgage Files and making or preparing,
as the case may be, the  certifications  referred to above,  the Trustee (or the
Custodian, as applicable) finds any document or documents constituting a part of
a Mortgage  File to be missing or  defective  in any  material  respect,  at the
conclusion  of its  review  the  Trustee  shall so notify  the  Originator,  the
Depositor and the Servicer. In addition,  upon the discovery by the Depositor or
the  Servicer (or upon  receipt by the Trustee of written  notification  of such
breach) of a breach of any of the  representations  and  warranties  made by the
Originator in the Master Agreement or the Seller in the Assignment  Agreement in
respect of any Mortgage Loan which  materially  adversely  affects such Mortgage
Loan or the interests of the related  Certificateholders  in such Mortgage Loan,
the party  discovering such breach shall give prompt written notice to the other
parties to this Agreement.

      The  Depositor  and the Trustee  intend that the  assignment  and transfer
herein  contemplated  constitute  a sale  of the  Mortgage  Loans,  the  related
Mortgage Notes and the related documents,  conveying good title thereto free and
clear of any liens and encumbrances,  from the Depositor to the Trustee in trust
for the benefit of the  Certificateholders and that such property not be part of
the  Depositor's  estate  or  property  of the  Depositor  in the  event  of any
insolvency by the Depositor.  In the event that such conveyance is deemed to be,
or to be made as security  for, a loan,  the parties  intend that the  Depositor
shall be deemed to have  granted  and does  hereby  grant to the Trustee a first
priority  perfected security interest in all of the Depositor's right, title and
interest  in and to the  Mortgage  Loans,  the  related  Mortgage  Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.

      SECTION  2.03.  Repurchase  or  Substitution  of  Mortgage  Loans by the
                      Originator or the Seller.

      (a)  Upon  discovery  or  receipt  of  written  notice  of any  materially
defective document in, or that a document is missing from, a Mortgage File or of
the  breach  by  the   Originator  or  the  Seller,   as   applicable,   of  any
representation,   warranty  or  covenant  under  the  Master  Agreement  or  the
Assignment  Agreement,  as  applicable,  in respect of any  Mortgage  Loan which
materially  adversely  affects the value of such  Mortgage  Loan or the interest
therein  of the  Certificateholders,  the  Trustee  shall  promptly  notify  the
Originator or the Seller,  as applicable,  of such defect,  missing  document or
breach and request that the  Originator  deliver  such missing  document or cure
such defect or that the  Originator  or the  Seller,  as  applicable,  cure such
breach  within  120  days  from  the  date  the  Originator  or the  Seller,  as
applicable,  was notified of such missing document, defect or breach, and if the
Originator does not deliver such missing  document or cure such defect or if the
Originator  or the  Seller,  as  applicable,  does not cure  such  breach in all
material respects during such period, the Trustee shall enforce the Originator's
obligation  under the Master  Agreement  or the  Seller's  obligation  under the
Assignment Agreement and notify the Originator or the Seller, as applicable,  of
its  obligation  to  repurchase  such  Mortgage  Loan from the Trust Fund at the
Purchase Price on or prior to the Determination Date following the expiration of
such 120 day period (subject to Section  2.03(e));  provided that, in connection
with any such breach that could not  reasonably  have been cured within such 120
day period,  if the Originator or the Seller,  as  applicable,  has commenced to
cure such breach within such 120 day period,  the  Originator or the Seller,  as
applicable, shall be


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<PAGE>

permitted to proceed  thereafter  diligently and  expeditiously to cure the same
within  the  additional   period   provided  under  the  Assignment   Agreement.
Notwithstanding  the foregoing,  to the extent of a breach by the Originator and
the Seller of any  representation,  warranty  or covenant  under the  Assignment
Agreement in respect of any Mortgage Loan which materially adversely affects the
value of such Mortgage Loan or the interest  therein of the  Certificateholders,
the  Trustee  shall  first  request  that the  Originator  cure  such  breach or
repurchase such Mortgage Loan and if the Originator fails to cure such breach or
repurchase such Mortgage Loan within 60 days of receipt of such request from the
Trustee,  the  Trustee  shall then  request  that the Seller cure such breach or
repurchase such Mortgage Loan.

      The Purchase Price for the repurchased  Mortgage Loan shall be remitted to
the  Servicer  for deposit in the  Collection  Account,  and the  Trustee,  upon
receipt  of written  certification  from the  Servicer  of such  deposit,  shall
release to the  Originator or the Seller,  as applicable,  the related  Mortgage
File and shall execute and deliver such  instruments  of transfer or assignment,
in each case without recourse,  representation or warranty, as the Originator or
the Seller, as applicable, shall furnish to it and as shall be necessary to vest
in the  Originator  or the Seller,  as  applicable,  any Mortgage  Loan released
pursuant hereto and the Trustee shall have no further responsibility with regard
to such  Mortgage  File (it being  understood  that the  Trustee  shall  have no
responsibility  for  determining  the  sufficiency  of such  assignment  for its
intended  purpose).  In lieu of repurchasing  any such Mortgage Loan as provided
above, the Originator or the Seller, as applicable, may cause such Mortgage Loan
to be  removed  from the  Trust  Fund (in which  case it shall  become a Deleted
Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in
the  manner  and  subject  to the  limitations  set  forth in  Section  2.03(d);
provided,  however,  the  Originator  or the  Seller,  as  applicable,  may  not
substitute  for any Mortgage Loan which  breaches a  representation  or warranty
regarding  abusive or predatory  lending laws. It is understood  and agreed that
the  obligation of the Originator or the Seller,  as  applicable,  to cure or to
repurchase  (or to  substitute  for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent  document exists or as to which such
a breach has occurred and is continuing shall constitute the sole remedy against
the Originator or the Seller, as applicable, respecting such omission, defect or
breach available to the Trustee on behalf of the Certificateholders.

      (b) Within 90 days of the earlier of discovery by the Depositor or receipt
of notice by the  Depositor  of the breach of any  representation,  warranty  or
covenant  of the  Depositor  set forth in Section  2.06,  which  materially  and
adversely affects the interests of the  Certificateholders in any Mortgage Loan,
the Depositor shall cure such breach in all material respects.

      (c) Within 90 days of the earlier of  discovery by the Servicer or receipt
of notice by the  Servicer  of the  breach of any  representation,  warranty  or
covenant  of the  Servicer  set  forth in  Section  2.05  which  materially  and
adversely affects the interests of the  Certificateholders in any Mortgage Loan,
the Servicer shall cure such breach in all material respects.

      (d) Any  substitution of Qualified  Substitute  Mortgage Loans for Deleted
Mortgage  Loans made pursuant to Section  2.03(a) must be effected  prior to the
last  Business  Day that is within two years after the Closing  Date.  As to any
Deleted  Mortgage Loan for which the  Originator or the Seller,  as  applicable,
substitutes a Qualified  Substitute  Mortgage Loan or Loans,  such  substitution
shall be effected by the Originator or the Seller, as applicable,  delivering to
the


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<PAGE>

Trustee,  for such  Qualified  Substitute  Mortgage Loan or Loans,  the Mortgage
Note, the Mortgage and the Assignment to the Trustee,  and such other  documents
and  agreements,  with all necessary  endorsements  thereon,  as are required by
Section 2.01,  together with an Officers'  Certificate  providing that each such
Qualified   Substitute  Mortgage  Loan  satisfies  the  definition  thereof  and
specifying  the  Substitution  Adjustment  (as  described  below),  if  any,  in
connection with such  substitution.  The Trustee shall  acknowledge  receipt for
such Qualified Substitute Mortgage Loan or Loans and, within 45 days thereafter,
shall  review such  documents  as  specified  in Section 2.02 and deliver to the
Depositor and the Servicer,  with respect to such Qualified  Substitute Mortgage
Loan or Loans,  a  certification  substantially  in the form attached  hereto as
Exhibit F-1, with any applicable  exceptions  noted thereon.  Within one year of
the date of  substitution,  the Trustee  shall  deliver to the Depositor and the
Servicer a  certification  substantially  in the form of Exhibit F-2 hereto with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions  noted  thereon.  Monthly  Payments  due with  respect  to  Qualified
Substitute Mortgage Loans in the month of substitution are not part of the Trust
Fund and will be retained by the Originator or the Seller,  as  applicable.  For
the month of substitution,  distributions to Certificateholders will reflect the
collections  and recoveries in respect of such Deleted  Mortgage Loan in the Due
Period preceding the month of substitution and the Originator or the Seller,  as
applicable,  shall  thereafter  be entitled  to retain all amounts  subsequently
received in respect of such Deleted Mortgage Loan. The Originator or the Seller,
as  applicable,  shall give or cause to be given written  notice to the Trustee,
who shall forward such notice to the Certificateholders,  that such substitution
has taken place,  shall amend the Mortgage  Loan Schedule to reflect the removal
of  such  Deleted  Mortgage  Loan  from  the  terms  of this  Agreement  and the
substitution  of the  Qualified  Substitute  Mortgage  Loan or Loans  and  shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee.  Upon such
substitution  by the  Originator or the Seller,  as  applicable,  such Qualified
Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and
shall  be  subject  in all  respects  to the  terms  of this  Agreement  and the
Assignment  Agreement,  including all applicable  representations and warranties
thereof included in the Assignment Agreement as of the date of substitution.

      For any  month in which  the  Originator  or the  Seller,  as  applicable,
substitutes  one or more  Qualified  Substitute  Mortgage  Loans for one or more
Deleted   Mortgage   Loans,   the  Servicer  will   determine  the  amount  (the
"Substitution Adjustment"), if any, by which the aggregate Purchase Price of all
such Deleted  Mortgage  Loans exceeds the  aggregate,  as to each such Qualified
Substitute Mortgage Loan, of the Stated Principal Balance thereof as of the date
of  substitution,  together with one month's  interest on such Stated  Principal
Balance at the applicable  Mortgage Rate. On the date of such substitution,  the
Originator or the Seller,  as applicable,  will deliver or cause to be delivered
to the  Servicer  for deposit in the  Collection  Account an amount equal to the
Substitution  Adjustment,  if any, and the Trustee,  upon receipt of the related
Qualified Substitute Mortgage Loan or Loans and certification by the Servicer of
such deposit, shall release to the Originator or the Seller, as applicable,  the
related Mortgage File or Files and shall execute and deliver such instruments of
transfer  or  assignment,  in each  case  without  recourse,  representation  or
warranty,  as the Originator or the Seller,  as applicable,  shall deliver to it
and as shall be  necessary to vest therein any Deleted  Mortgage  Loan  released
pursuant hereto.

      In addition, the Originator or the Seller, as applicable,  shall obtain at
its own  expense  and deliver to the Trustee an Opinion of Counsel to the effect
that such  substitution  will not cause


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<PAGE>

(a)  any  federal  tax  to be  imposed  on the  Trust  Fund,  including  without
limitation,  any federal tax imposed on "prohibited  transactions" under Section
860F(a)(I)  of the Code or on  "contributions  after  the  startup  date"  under
Section 860G(d)(I) of the Code or (b) any REMIC to fail to qualify as a REMIC at
any time that any Certificate is outstanding. If such Opinion of Counsel can not
be delivered,  then such  substitution  may only be effected at such time as the
required Opinion of Counsel can be given.

      (e) Upon discovery by the Depositor,  the 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 within two
Business  Days give  written  notice  thereof to the other  parties  hereto.  In
connection therewith, the Originator or the Depositor, as the case may be, shall
repurchase  or,  subject  to the  limitations  set  forth  in  Section  2.03(d),
substitute  one or more  Qualified  Substitute  Mortgage  Loans for the affected
Mortgage  Loan  within 90 days of the  earlier of  discovery  or receipt of such
notice  with  respect  to  such  affected  Mortgage  Loan.  Such  repurchase  or
substitution shall be made (i) by the Originator if the affected Mortgage Loan's
status  as a  non-qualified  mortgage  is  or  results  from  a  breach  of  any
representation, warranty or covenant made by the Originator under the Assignment
Agreement or (ii) the  Depositor,  if the affected  Mortgage  Loan's status as a
non-qualified  mortgage  is a breach of any  representation  or  warranty of the
Depositor  set  forth in  Section  2.06,  or if its  status  as a  non-qualified
mortgage is a breach of no  representation  or warranty.  Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a) or
2.03(d),  if  made  by the  Originator,  or  Section  2.03(b),  if  made  by the
Depositor. The Trustee shall reconvey to the Depositor or the Originator, as the
case may be,  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.

      SECTION 2.04. Intentionally Omitted.

      SECTION 2.05. Representations, Warranties and Covenants of the Servicer.

      The Servicer hereby represents, warrants and covenants to the Trustee, for
the  benefit  of each of the  Trustee  and  the  Certificateholders,  and to the
Depositor,  that as of the Closing Date or as of such date specifically provided
herein:

            (i) The Servicer is duly organized,  validly  existing,  and in good
      standing under the laws of the  jurisdiction  of its formation and has all
      licenses  necessary to carry on its business as now being conducted and is
      licensed, qualified and in good standing in the states where the Mortgaged
      Property is located (or is otherwise exempt under applicable law from such
      qualification)   if  the  laws  of  such  state   require   licensing   or
      qualification  in order to conduct  business of the type  conducted by the
      Servicer or to ensure the  enforceability  or  validity  of each  Mortgage
      Loan; the Servicer has the power and authority to execute and deliver this
      Agreement and to perform in accordance herewith;  the execution,  delivery
      and  performance of this Agreement  (including all instruments of transfer
      to be  delivered  pursuant  to  this  Agreement)  and  all  documents  and
      instruments  contemplated  hereby which are executed and  delivered by the
      Servicer and the consummation of the transactions contemplated hereby have
      been duly and validly authorized; this Agreement and all


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<PAGE>

      documents  and  instruments  contemplated  hereby  which are  executed and
      delivered by the  Servicer,  assuming  due  authorization,  execution  and
      delivery by the other parties  hereto,  evidences  the valid,  binding and
      enforceable obligation of the Servicer,  subject to applicable bankruptcy,
      insolvency, reorganization, moratorium or other similar laws affecting the
      enforcement of creditors'  rights generally;  and all requisite  corporate
      action  has been  taken by the  Servicer  to make this  Agreement  and all
      documents  and  instruments  contemplated  hereby  which are  executed and
      delivered  by  the  Servicer  valid  and  binding  upon  the  Servicer  in
      accordance with its terms;

            (ii)  The  consummation  of the  transactions  contemplated  by this
      Agreement are in the ordinary  course of business of the Servicer and will
      not  result  in the  material  breach  of any  term  or  provision  of the
      certificate  of formation or limited  liability  company  agreement of the
      Servicer or result in the breach of any term or provision  of, or conflict
      with or  constitute a default under or result in the  acceleration  of any
      obligation under, any agreement,  indenture or loan or credit agreement or
      other  instrument  to which the  Servicer or its  property is subject,  or
      result in the violation of any law, rule,  regulation,  order, judgment or
      decree to which the Servicer or its property is subject;

            (iii) The execution  and delivery of this  Agreement by the Servicer
      and the  performance  and compliance  with its  obligations  and covenants
      hereunder  do not require  the  consent or  approval  of any  governmental
      authority  or,  if such  consent  or  approval  is  required,  it has been
      obtained;

            (iv) [Reserved];

            (v) The Servicer  does not  believe,  nor does it have any reason or
      cause to believe, that it cannot perform each and every covenant contained
      in this Agreement;

            (vi) There is no action, suit,  proceeding or investigation  pending
      or,  to its  knowledge,  threatened  against  the  Servicer  that,  either
      individually  or in the  aggregate,  (A) may  result in any  change in the
      business,  operations,  financial  condition,  properties or assets of the
      Servicer  that might  prohibit  or  materially  and  adversely  affect the
      performance by such Servicer of its obligations  under, or the validity or
      enforceability  of,  this  Agreement,  or (B) may  result in any  material
      impairment  of the  right  or  ability  of the  Servicer  to  carry on its
      business  substantially as now conducted,  or (C) would draw into question
      the validity or enforceability of this Agreement or of any action taken or
      to  be  taken  in  connection   with  the   obligations  of  the  Servicer
      contemplated herein, or (D) would otherwise be likely to impair materially
      the ability of the Servicer to perform under the terms of this Agreement;

            (vii) Neither this Agreement nor any information,  certificate of an
      officer, statement furnished in writing or report delivered to the Trustee
      by the Servicer in connection with the  transactions  contemplated  hereby
      contains any untrue statement of a material fact;

            (viii) The Servicer will not waive any  Prepayment  Charge unless it
      is waived in accordance with the standard set forth in Section 3.01; and


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<PAGE>

            (ix) The  Servicer  has  accurately  and  fully  reported,  and will
      continue to accurately and fully report on a monthly  basis,  its borrower
      credit files for the Mortgage Loans to each of the three  national  credit
      repositories in a timely manner.

      It is  understood  and agreed  that the  representations,  warranties  and
covenants set forth in this Section 2.05 shall survive  delivery of the Mortgage
Files  to the  Trustee  and  shall  inure to the  benefit  of the  Trustee,  the
Depositor and the  Certificateholders.  Upon  discovery by any of the Depositor,
the Servicer or the Trustee of a breach of any of the foregoing representations,
warranties and covenants which materially and adversely affects the value of any
Mortgage   Loan,   Prepayment   Charge   or  the   interests   therein   of  the
Certificateholders,  the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following  such  discovery)
to the Servicer and the Trustee.  Notwithstanding the foregoing,  within 90 days
of the earlier of discovery by the Servicer or receipt of notice by the Servicer
of the breach of the  representation  or covenant of the  Servicer  set forth in
Section 2.05(viii) above which materially and adversely affects the interests of
the Holders of the Class P Certificates in any Prepayment  Charge,  the Servicer
must pay the amount of such  waived  Prepayment  Charge,  for the benefit of the
Holders  of the  Class P  Certificates,  by  depositing  such  amount  into  the
Collection  Account.  The  foregoing  shall  not,  however,  limit any  remedies
available to the  Certificateholders,  the Depositor or the Trustee on behalf of
the Certificateholders,  pursuant to the Master Agreement respecting a breach of
the representations, warranties and covenants of the Originator.

      SECTION 2.06. Representations and Warranties of the Depositor.

      The Depositor  represents and warrants to the Trust,  the Servicer and the
Trustee on behalf of the Certificateholders as follows:

            (i) This agreement constitutes a legal, valid and binding obligation
      of the Depositor, enforceable against the Depositor in accordance with its
      terms,  except as enforceability may be limited by applicable  bankruptcy,
      insolvency,  reorganization,  moratorium  or  other  similar  laws  now or
      hereafter in effect  affecting the  enforcement  of  creditors'  rights in
      general  and  except as such  enforceability  may be  limited  by  general
      principles  of equity  (whether  considered  in a proceeding  at law or in
      equity);

            (ii)  Immediately  prior to the sale and assignment by the Depositor
      to the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor
      had good and marketable title to each Mortgage Loan (insofar as such title
      was  conveyed  to it by the  Seller)  subject  to no  prior  lien,  claim,
      participation  interest,  mortgage,  security interest,  pledge, charge or
      other encumbrance or other interest of any nature;

            (iii) As of the Closing  Date,  the Depositor  has  transferred  all
      right,  title and interest in the Mortgage  Loans to the Trustee on behalf
      of the Trust;

            (iv) The Depositor  has not  transferred  the Mortgage  Loans to the
      Trustee on behalf of the Trust with any intent to hinder, delay or defraud
      any of its creditors;


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<PAGE>


            (v) The Depositor has been duly incorporated and is validly existing
      as a corporation  in good standing  under the laws of Delaware,  with full
      corporate  power and  authority to own its assets and conduct its business
      as presently being conducted;

            (vi)  The   Depositor  is  not  in  violation  of  its  articles  of
      incorporation or by-laws or in default in the performance or observance of
      any material obligation, agreement, covenant or condition contained in any
      contract,  indenture,  mortgage,  loan  agreement,  note,  lease  or other
      instrument  to  which  the  Depositor  is a party  or by  which  it or its
      properties  may be bound,  which  default  might  result  in any  material
      adverse changes in the financial condition,  earnings, affairs or business
      of the  Depositor  or which  might  materially  and  adversely  affect the
      properties or assets, taken as a whole, of the Depositor;

            (vii) The execution,  delivery and  performance of this Agreement by
      the  Depositor,  and the  consummation  of the  transactions  contemplated
      thereby,  do not and will not result in a material  breach or violation of
      any of the terms or provisions  of, or, to the knowledge of the Depositor,
      constitute a default under, any indenture,  mortgage,  deed of trust, loan
      agreement or other  agreement or  instrument  to which the  Depositor is a
      party or by which the  Depositor  is bound or to which any of the property
      or assets of the Depositor is subject, nor will such actions result in any
      violation of the provisions of the articles of incorporation or by-laws of
      the  Depositor  or,  to the  best  of the  Depositor's  knowledge  without
      independent investigation, any statute or any order, rule or regulation of
      any court or  governmental  agency or body  having  jurisdiction  over the
      Depositor or any of its properties or assets  (except for such  conflicts,
      breaches,  violations  and  defaults as would not have a material  adverse
      effect on the ability of the  Depositor to perform its  obligations  under
      this Agreement);

            (viii)  To  the  best  of  the  Depositor's  knowledge  without  any
      independent  investigation,  no consent, approval,  authorization,  order,
      registration or qualification of or with any court or governmental  agency
      or body of the United States or any other jurisdiction is required for the
      issuance of the Certificates,  or the consummation by the Depositor of the
      other transactions  contemplated by this Agreement,  except such consents,
      approvals,  authorizations,  registrations or qualifications as (a) may be
      required under State securities or Blue Sky laws, (b) have been previously
      obtained or (c) the  failure of which to obtain  would not have a material
      adverse  effect on the  performance  by the  Depositor of its  obligations
      under, or the validity or enforceability of, this Agreement; and

            (ix) There are no actions,  proceedings  or  investigations  pending
      before  or,  to  the  Depositor's  knowledge,  threatened  by  any  court,
      administrative  agency or other tribunal to which the Depositor is a party
      or of which any of its properties is the subject:  (a) which if determined
      adversely to the  Depositor  would have a material  adverse  effect on the
      business,  results of operations or financial  condition of the Depositor;
      (b) asserting the  invalidity of this Agreement or the  Certificates;  (c)
      seeking to prevent the issuance of the Certificates or the consummation by
      the Depositor of any of the  transactions  contemplated by this Agreement,
      as the case may be; or (d) which might materially and adversely affect the
      performance by the Depositor of its obligations  under, or the validity or
      enforceability of, this Agreement.


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<PAGE>


      SECTION 2.07. Issuance of Certificates.

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

      SECTION 2.08.  [Reserved].

      SECTION  2.09. Conveyance of REMIC Regular  Interests and Acceptance of
                     REMIC 1,  REMIC 2,  REMIC 3 and REMIC 4 by the  Trustee;
                     Issuance of Certificates.

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

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

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


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<PAGE>

evidenced by the Class R-3  Interest,  together  with the Class C  Certificates,
constitute the entire beneficial ownership interest in REMIC 3.

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

      (e)  Concurrently  with (i) the  assignment and delivery to the Trustee of
REMIC 1 and the  acceptance  by the Trustee  thereof,  pursuant to Section 2.01,
Section 2.02 and subsection (a) hereof,  (ii) the assignment and delivery to the
Trustee of REMIC 2 (including the Residual  Interest therein  represented by the
Class R-2 Interest), (iii) the assignment and delivery to the Trustee of REMIC 3
(including the Residual Interest therein  represented by the Class R-3 Interest)
and (iv) the  assignment  and delivery to the Trustee of REMIC 4 (including  the
Residual  Interest  therein  represented  by the  Class  R-4  Interest)  and the
acceptance  by the Trustee  thereof,  pursuant  to  subsection  (c) hereof,  the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the  Depositor,  (A) the Class R  Certificates  in  authorized  denominations
evidencing  the Class R-1  Interest and the Class R-2 Interest and (B) the Class
R-X Certificates in authorized  denominations  evidencing the Class R-3 Interest
and the Class R-4 Interest.







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<PAGE>


                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

      SECTION 3.01. Servicer to Act as Servicer.

      The Servicer  shall service and administer the Mortgage Loans on behalf of
the  Trust  and  in  the  best   interests   of  and  for  the  benefit  of  the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance  with the terms of this  Agreement and the Mortgage Loans and, to the
extent  consistent  with such terms, in the same manner in which it services and
administers   similar   mortgage  loans  for  its  own  portfolio,   giving  due
consideration  to customary and usual standards of practice of mortgage  lenders
and loan servicers administering similar mortgage loans but without regard to:

            (i) any  relationship  that the Servicer,  any  Sub-Servicer  or any
      Affiliate  of the Servicer or any  Sub-Servicer  may have with the related
      Mortgagor;

            (ii)  the  ownership  or  non-ownership  of any  Certificate  by the
      Servicer or any Affiliate of the Servicer;

            (iii)  the  Servicer's  obligation  to make  Advances  or  Servicing
      Advances; or

            (iv)  the  Servicer's  or  any   Sub-Servicer's   right  to  receive
      compensation for its services  hereunder or with respect to any particular
      transaction.

      To the extent  consistent with the foregoing,  the Servicer (a) shall seek
the timely and complete recovery of principal and interest on the Mortgage Notes
and (b) shall  waive (or permit a Sub-  Servicer to waive) a  Prepayment  Charge
only  under  the  following  circumstances:  (i) such  waiver  is  standard  and
customary in servicing  similar  Mortgage  Loans,  (ii) such waiver relates to a
default  or a  reasonably  foreseeable  default  and  would,  in the  reasonable
judgment  of the  Servicer,  maximize  recovery  of total  proceeds  taking into
account the value of such Prepayment Charge and the related Mortgage Loan, (iii)
the  collection  of such  Prepayment  Charge would be in violation of applicable
laws or (iv) such waiver is in accordance with the Servicer's internal policies.
If a Prepayment Charge is waived as permitted by meeting the standard  described
in clause (iii)  above,  then the Servicer  shall make  commercially  reasonable
efforts to enforce the Trustee's rights under the Assignment Agreement including
the  obligation of the  Originator  to pay the amount of such waived  Prepayment
Charge to the Servicer for deposit in the Collection  Account for the benefit of
the  Holders of the Class P  Certificates.  If the  Servicer  makes a good faith
determination,  as  evidenced  by an  officer's  certificate  delivered  by  the
Servicer to the Trustee, that the Servicer's efforts are not reasonably expected
to be successful in enforcing  such rights,  it shall notify the Trustee of such
failure,  and the Trustee shall enforce the obligation of the  Originator  under
the  Assignment  Agreement  to pay to the  Servicer  the  amount of such  waived
Prepayment  Charge. If a Prepayment Charge is waived as permitted by meeting the
standard  described in clause (iv) above,  then the Servicer  shall  deposit the
amount of such  waived  Prepayment  Charge  in the  Collection  Account  for the
benefit of the Holders of the Class P Certificates.


                                       67
<PAGE>


      Subject only to the  above-described  servicing standards and the terms of
this Agreement and of the Mortgage Loans, the Servicer shall have full power and
authority,  acting alone or through Sub-  Servicers as provided in Section 3.02,
to do or cause to be done any and all things in connection  with such  servicing
and  administration  which it may deem necessary or desirable.  Without limiting
the generality of the foregoing, the Servicer, in the name of the Trust Fund, is
hereby  authorized  and  empowered by the Trustee when the Servicer  believes it
appropriate in its best judgment in accordance with the Servicing  Standard,  to
execute and deliver, on behalf of the  Certificateholders  and the Trustee,  any
and all  instruments  of  satisfaction  or  cancellation,  or of partial or full
release or discharge, and all other comparable instruments,  with respect to the
Mortgage  Loans  and  the  Mortgaged  Properties  and to  institute  foreclosure
proceedings  or  obtain a  deed-in-lieu  of  foreclosure  so as to  convert  the
ownership  of such  properties,  and to hold or cause  to be held  title to such
properties, on behalf of the Trustee and Certificateholders.  The Servicer shall
service and administer the Mortgage Loans in accordance  with  applicable  state
and federal law and shall provide to the Mortgagors  any reports  required to be
provided to them thereby.  The Servicer shall also comply in the  performance of
this Agreement with all reasonable  rules and requirements of each insurer under
any standard hazard insurance  policy.  Subject to Section 3.17, within five (5)
days of the Closing Date,  the Trustee shall execute and furnish to the Servicer
and any  Sub-Servicer  any  limited  powers of attorney in the form of Exhibit I
hereto and other  documents  necessary or  appropriate to enable the Servicer or
any  Sub-Servicer  to  carry  out  their  servicing  and  administrative  duties
hereunder; provided, such limited powers of attorney or other documents shall be
prepared by the Servicer and submitted to the Trustee for execution. The Trustee
shall not be liable for the actions by the Servicer or any  Sub-Servicers  under
such powers of attorney and shall be  indemnified  by the Servicer (from its own
funds without any right of reimbursement from the Collection  Account),  for any
costs,  liabilities or expenses  incurred by the Trustee in connection  with the
use or misuse of such powers of attorney..

      Subject to Section 3.09 hereof,  in  accordance  with the standards of the
preceding paragraph,  the Servicer, on escrowed accounts, 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
Servicing Advances  reimbursable in the first instance from related  collections
from the Mortgagors pursuant to Section 3.09, and further as provided in Section
3.11.  Any cost  incurred by the Servicer or by  Sub-Servicers  in effecting the
payment of taxes and  assessments  on a Mortgaged  Property  shall not,  for the
purpose of  calculating  distributions  to  Certificateholders,  be added to the
unpaid Stated Principal  Balance of the related  Mortgage Loan,  notwithstanding
that the terms of such Mortgage Loan so permit.

      Notwithstanding  anything in this Agreement to the contrary,  the Servicer
may not make any future  advances  with  respect to a Mortgage  Loan  (except as
provided in Section 4.04) and the Servicer shall not (i) permit any modification
with respect to any Mortgage Loan that would change the Mortgage Rate, reduce or
increase the Stated  Principal  Balance  (except for  reductions  resulting from
actual payments of principal) or change the final maturity date on such Mortgage
Loan,  (unless,  in any such case, as provided in Section 3.07, the Mortgagor is
in default with respect to the Mortgage Loan or such default is, in the judgment
of the Servicer, reasonably foreseeable) or (ii) permit any modification, waiver
or  amendment  of any term of any  Mortgage  Loan that  would both (A) effect an
exchange or  reissuance of such Mortgage Loan under Section 1001 of the Code (or
Treasury  regulations  promulgated  thereunder)  and (B) cause any REMIC created
hereunder to


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<PAGE>

fail to  qualify  as a REMIC  under  the  Code or the  imposition  of any tax on
"prohibited  transactions" or  "contributions  after the startup date" under the
REMIC Provisions.

      SECTION 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers.

      (a)  The   Servicer   may  enter  into   Sub-Servicing   Agreements   with
Sub-Servicers,  which may be Affiliates  of the Servicer,  for the servicing and
administration  of the Mortgage Loans;  provided,  however,  such  sub-servicing
arrangement  and the terms of the related  Sub-Servicing  Agreement must provide
for the  servicing  of the  Mortgage  Loans  in a  manner  consistent  with  the
servicing arrangement  contemplated hereunder.  The Trustee is hereby authorized
to acknowledge,  at the request of the Servicer, any Sub-Servicing Agreement. No
such  acknowledgment  shall be deemed to imply that the Trustee has consented to
any such  Sub-Servicing  Agreement,  has passed upon whether such  Sub-Servicing
Agreement  meets the  requirements  applicable to  Sub-Servicing  Agreements set
forth in this Agreement or has passed upon whether such Sub-Servicing  Agreement
is otherwise permitted under this Agreement.

      Each  Sub-Servicer  shall be (i)  authorized  to transact  business in the
state or states  where the  related  Mortgaged  Properties  it is to service are
situated,  if and  to the  extent  required  by  applicable  law to  enable  the
Sub-Servicer  to perform its obligations  hereunder and under the  Sub-Servicing
Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage servicer.  Each
Sub-Servicing Agreement must impose on the Sub-Servicer  requirements conforming
to the  provisions  set forth in Section  3.08 and provide for  servicing of the
Mortgage Loans  consistent with the terms of this  Agreement.  The Servicer will
examine  each  Sub-Servicing  Agreement  and will be  familiar  with  the  terms
thereof. The terms of any Sub- Servicing Agreement will not be inconsistent with
any of the  provisions of this  Agreement.  Any  variation in any  Sub-Servicing
Agreements  from the  provisions set forth in Section 3.08 relating to insurance
or priority  requirements of Sub-Servicing  Accounts,  or credits and charges to
the  Sub-Servicing  Accounts  or the  timing and  amount of  remittances  by the
Sub-Servicers to the Servicer,  are conclusively  deemed to be inconsistent with
this  Agreement  and  therefore  prohibited.  The Servicer  shall deliver to the
Trustee  copies  of  all  Sub-Servicing   Agreements,   and  any  amendments  or
modifications  thereof,  promptly upon the Servicer's  execution and delivery of
such instruments.

      (b) As part of its servicing activities hereunder,  the Servicer,  for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each  Sub-Servicer  under the  related  Sub-Servicing  Agreement,  including,
without  limitation,  any  obligation  to make advances in respect of delinquent
payments as required by a Sub-Servicing Agreement. Such enforcement,  including,
without   limitation,   the  legal   prosecution   of  claims,   termination  of
Sub-Servicing  Agreements,  and the pursuit of other appropriate remedies, shall
be in such  form  and  carried  out to such an  extent  and at such  time as the
Servicer,  in its good faith business judgment,  would require were it the owner
of the  related  Mortgage  Loans.  The  Servicer  shall  pay the  costs  of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery  resulting from such  enforcement,  to the extent, if any, that
such recovery  exceeds all amounts due in respect of the related Mortgage Loans,
or (ii) from a specific  recovery of costs,  expenses or attorneys' fees against
the party against whom such enforcement is directed.


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<PAGE>

      SECTION 3.03. Successor Sub-Servicers.

      The Servicer  shall be entitled to terminate any  Sub-Servicing  Agreement
and the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing
Agreement in  accordance  with the terms and  conditions  of such  Sub-Servicing
Agreement.  In the  event of  termination  of any  Sub-Servicer,  all  servicing
obligations of such Sub-Servicer shall be assumed simultaneously by the Servicer
without any act or deed on the part of such  Sub-Servicer  or the Servicer,  and
the Servicer either shall service  directly the related  Mortgage Loans or shall
enter  into a  Sub-Servicing  Agreement  with  a  successor  Sub-Servicer  which
qualifies under Section 3.02.

      Any  Sub-Servicing   Agreement  shall  include  the  provision  that  such
agreement may be  immediately  terminated by the Servicer or the Trustee (if the
Trustee is acting as Servicer) without fee, in accordance with the terms of this
Agreement, in the event that the Servicer (or the Trustee, if such party is then
acting as Servicer) shall, for any reason, no longer be the Servicer  (including
termination due to a Servicer Event of Termination).

      SECTION 3.04. Liability of the Servicer.

      Notwithstanding  any  Sub-Servicing  Agreement or the  provisions  of this
Agreement  relating to  agreements  or  arrangements  between the Servicer and a
Sub-Servicer  or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain  obligated and primarily liable to the Trustee and the
Certificateholders  for the servicing and administering of the Mortgage Loans in
accordance  with the  provisions  of Section  3.01  without  diminution  of such
obligation  or  liability  by  virtue  of  such  Sub-  Servicing  Agreements  or
arrangements or by virtue of  indemnification  from the  Sub-Servicer and to the
same extent and under the same terms and  conditions  as if the  Servicer  alone
were  servicing and  administering  the Mortgage  Loans.  The Servicer  shall be
entitled to enter into any agreement with a Sub- Servicer for indemnification of
the Servicer by such  Sub-Servicer and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.

      SECTION 3.05.  No Contractual  Relationship  Between  Sub-Servicers and
                     the Trustee or Certificateholders.

      Any Sub-Servicing  Agreement that may be entered into and any transactions
or services  relating to the  Mortgage  Loans  involving a  Sub-Servicer  in its
capacity as such shall be deemed to be between the Sub-Servicer and the Servicer
alone, and the Trustee or Certificateholders shall not be deemed parties thereto
and shall  have no  claims,  rights,  obligations,  duties or  liabilities  with
respect to the  Sub-Servicer  except as set forth in Section 3.06.  The Servicer
shall be solely liable for all fees owed by it to any Sub-Servicer, irrespective
of whether the Servicer's  compensation pursuant to this Agreement is sufficient
to pay such fees.


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<PAGE>

      SECTION 3.06.  Assumption or Termination of Sub-Servicing Agreements by
                     Trustee.

      In the event the  Servicer  shall for any reason no longer be the servicer
(including by reason of the occurrence of a Servicer Event of Termination),  the
Trustee,  pursuant to its duties under Section 7.02,  shall thereupon assume all
of the rights and obligations of the Servicer under each Sub-Servicing Agreement
that the Servicer may have entered into,  unless the Trustee elects to terminate
any Sub- Servicing Agreement in accordance with its terms as provided in Section
3.03. Upon such  assumption,  the Trustee (or the successor  servicer  appointed
pursuant to Section  7.02)  shall be deemed,  subject to Section  3.03,  to have
assumed all of the departing  Servicer's  interest  therein and to have replaced
the departing  Servicer as a party to each  Sub-Servicing  Agreement to the same
extent as if each  Sub-Servicing  Agreement  had been  assigned to the  assuming
party,  except that (i) the departing  Servicer shall not thereby be relieved of
any liability or obligations under any Sub-Servicing Agreement that arose before
it ceased to be the  Servicer  and (ii)  neither the  Trustee nor any  successor
Servicer  shall be deemed to have  assumed any  liability or  obligation  of the
Servicer that arose before it ceased to be the Servicer.

      The Servicer at its expense shall, upon request of the Trustee, deliver to
the assuming  party all  documents  and records  relating to each  Sub-Servicing
Agreement  and the  Mortgage  Loans then being  serviced  and an  accounting  of
amounts  collected  and held by or on behalf of it, and  otherwise  use its best
efforts  to effect the  orderly  and  efficient  transfer  of the  Sub-Servicing
Agreements to the assuming party. All Servicing  Transfer Costs shall be paid by
the predecessor  Servicer upon presentation of reasonable  documentation of such
costs, and if such predecessor  Servicer  defaults in its obligation to pay such
costs,  such costs  shall be paid by the  successor  Servicer or the Trustee (in
which case the  successor  Servicer  or the  Trustee,  as  applicable,  shall be
entitled to reimbursement therefor from the assets of the Trust).

      SECTION 3.07. Collection of Certain Mortgage Loan Payments.

      The  Servicer  shall  make  reasonable  efforts,  in  accordance  with the
Servicing  Standard,  to  collect  all  payments  called for under the terms and
provisions of the Mortgage Loans and the provisions of any applicable  insurance
policies provided to the Servicer.  Consistent with the foregoing,  the Servicer
may in its discretion  (i) waive any late payment charge or, if applicable,  any
penalty  interest,  or any provisions of any Mortgage Loan requiring the related
Mortgagor to submit to mandatory  arbitration  with respect to disputes  arising
thereunder  or (ii)  extend  the due dates  for the  Monthly  Payments  due on a
Mortgage Note for a period of not greater than 180 days; provided, however, that
any  extension  pursuant to clause (ii) above shall not affect the  amortization
schedule of any Mortgage Loan for purposes of any computation hereunder,  except
as provided below. In the event of any such arrangement  pursuant to clause (ii)
above, the Servicer shall make timely Advances on such Mortgage Loan during such
extension  pursuant  to Section  4.04 and in  accordance  with the  amortization
schedule of such  Mortgage Loan without  modification  thereof by reason of such
arrangement.  Notwithstanding the foregoing, in the event that any Mortgage Loan
is in default or, in the judgment of the  Servicer,  such default is  reasonably
foreseeable,  the Servicer,  consistent  with the standards set forth in Section
3.01, may also waive,  modify or vary any term of such Mortgage Loan  (including
modifications  that would  change the  Mortgage  Rate,  forgive  the  payment of
principal or interest or extend the final maturity date of such Mortgage  Loan),
accept payment


                                       71
<PAGE>

from the related  Mortgagor of an amount less than the Stated Principal  Balance
in final  satisfaction of such Mortgage Loan, or consent to the  postponement of
strict  compliance  with any such  term or  otherwise  grant  indulgence  to any
Mortgagor (any and all such waivers,  modifications,  variances,  forgiveness of
principal or interest,  postponements,  or indulgences  collectively referred to
herein as "forbearance"). The Servicer's analysis supporting any forbearance and
the conclusion that any forbearance meets the standards of Section 3.01 shall be
reflected in writing in the Mortgage File.

      SECTION 3.08. Sub-Servicing Accounts.

      In those cases where a Sub-Servicer  is servicing a Mortgage Loan pursuant
to a Sub- Servicing  Agreement,  the Sub-Servicer  will be required to establish
and maintain one or more accounts (collectively,  the "Sub-Servicing  Account").
The Sub-Servicing Account shall be an Eligible Account and shall comply with all
requirements  of  this  Agreement  relating  to  the  Collection  Account.   The
Sub-Servicer  shall  deposit in the  clearing  account  in which it  customarily
deposits  payments and  collections  on mortgage  loans in  connection  with its
mortgage loan servicing  activities on a daily basis,  and in no event more than
one  Business  Day after the  Sub-Servicer's  receipt  thereof,  all proceeds of
Mortgage Loans received by the Sub-Servicer  less its servicing  compensation to
the  extent  permitted  by the  Sub-Servicing  Agreement,  and shall  thereafter
deposit such  amounts in the  Sub-Servicing  Account,  in no event more than two
Business  Days  after  the  receipt  of such  amounts.  The  Sub-Servicer  shall
thereafter  deposit  such  proceeds  in the  Collection  Account  or remit  such
proceeds to the  Servicer for deposit in the  Collection  Account not later than
two  Business  Days  after the  deposit  of such  amounts  in the  Sub-Servicing
Account.  For purposes of this  Agreement,  the Servicer shall be deemed to have
received  payments on the Mortgage  Loans when the  Sub-Servicer  receives  such
payments.

      SECTION 3.09.  Collection of Taxes,  Assessments and Similar Items; Escrow
                     Accounts.

      To the extent  required by the related  Mortgage  Note, the Servicer shall
establish and maintain,  or cause to be established and maintained,  one or more
accounts  (the  "Escrow  Accounts"),  into  which all Escrow  Payments  shall be
deposited and retained. Escrow Accounts shall be Eligible Accounts. The Servicer
shall deposit in the clearing account in which it customarily  deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities,  all Escrow Payments  collected on account of the Mortgage Loans and
shall  deposit in the Escrow  Accounts,  in no event more than two Business Days
after the receipt of such Escrow  Payments,  all Escrow  Payments  collected  on
account of the Mortgage  Loans for the purpose of  effecting  the payment of any
such items as required under the terms of this Agreement. Withdrawals of amounts
from  an  Escrow  Account  may be made  only to (i)  effect  payment  of  taxes,
assessments,  hazard insurance premiums, and comparable items in a manner and at
a time that  assures that the lien  priority of the Mortgage is not  jeopardized
(or, with respect to the payment of taxes, in a manner and at a time that avoids
the loss of the  Mortgaged  Property due to a tax sale or the  foreclosure  as a
result of a tax lien);  (ii)  reimburse the Servicer (or a  Sub-Servicer  to the
extent  provided  in  the  related  Sub-Servicing   Agreement)  out  of  related
collections  for any  Servicing  Advances  made  pursuant to Section  3.01 (with
respect to taxes and  assessments)  and  Section  3.14  (with  respect to hazard
insurance);  (iii)  refund to  Mortgagors  any sums as may be  determined  to be
overages;  (iv) pay interest,  if required and as described below, to Mortgagors
on balances in the Escrow Account; or


                                       72
<PAGE>

(v) clear and terminate the Escrow Account at the  termination of the Servicer's
obligations  and  responsibilities  in respect of the Mortgage  Loans under this
Agreement in accordance  with Article X. In the event the Servicer shall deposit
in a Escrow Account any amount not required to be deposited  therein,  it may at
any time withdraw such amount from such Escrow Account,  any provision herein to
the  contrary  notwithstanding.   The  Servicer  will  be  responsible  for  the
administration  of the Escrow  Accounts and will be obligated to make  Servicing
Advances to such  accounts when and as necessary to avoid the lapse of insurance
coverage on the  Mortgaged  Property,  or which the  Servicer  knows,  or in the
exercise of the required standard of care of the Servicer hereunder should know,
is  necessary to avoid the loss of the  Mortgaged  Property due to a tax sale or
the foreclosure as a result of a tax lien. If any such payment has not been made
and the  Servicer  receives  notice of a tax lien with  respect to the  Mortgage
being  imposed,  the Servicer  will,  within 10 Business Days of receipt of such
notice,  advance or cause to be advanced funds  necessary to discharge such lien
on the Mortgaged Property.  As part of its servicing duties, the Servicer or any
Sub-Servicers  shall  pay to the  Mortgagors  interest  on funds  in the  Escrow
Accounts,  to the extent required by law and, to the extent that interest earned
on funds in the Escrow Accounts is  insufficient,  to pay such interest from its
or their own funds, without any reimbursement  therefor. The Servicer may pay to
itself any excess interest on funds in the Escrow  Accounts,  to the extent such
action is in  conformity  with the Servicing  Standard,  is permitted by law and
such  amounts are not required to be paid to  Mortgagors  or used for any of the
other purposes set forth above.

      SECTION 3.10. Collection Account and Distribution Account.

      (a) On  behalf  of the  Trust  Fund,  the  Servicer  shall  establish  and
maintain, or cause to be established and maintained,  one or more accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the  Trustee  and the  Certificateholders.  On  behalf of the  Trust  Fund,  the
Servicer shall deposit or cause to be deposited in the Collection Account, in no
event more than two Business Days after the Servicer's  receipt thereof,  as and
when received or as otherwise  required  hereunder,  the following  payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of  principal  or  interest on the  Mortgage  Loans due on or before the
Cut-off Date) or payments (other than Principal  Prepayments)  received by it on
or prior to the Cut-off Date but allocable to a Due Period subsequent thereto:

            (i) all  payments  on  account  of  principal,  including  Principal
      Prepayments (but not Prepayment Charges), on the Mortgage Loans;

            (ii) all payments on account of interest (net of the Servicing  Fee)
      on each Mortgage Loan;

            (iii)  all  Insurance  Proceeds,  Liquidation  Proceeds,  Subsequent
      Recoveries and  condemnation  proceeds  (other than proceeds  collected in
      respect of any particular REO Property and amounts paid in connection with
      a  purchase  of  Mortgage  Loans and REO  Properties  pursuant  to Section
      10.01);

            (iv) any amounts  required to be deposited  pursuant to Section 3.12
      in  connection  with any losses  realized on  Permitted  Investments  with
      respect to funds held in the Collection Account;


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<PAGE>


            (v) any amounts required to be deposited by the Servicer pursuant to
      the second  paragraph of Section  3.14(a) in respect of any blanket policy
      deductibles;

            (vi) all proceeds of any Mortgage Loan  repurchased  or purchased in
      accordance with Section 2.03, Section 3.16(c) or Section 10.01;

            (vii) all  amounts  required  to be  deposited  in  connection  with
      Substitution Adjustments pursuant to Section 2.03; and

            (viii) all  Prepayment  Charges  collected  by the  Servicer and any
      Servicer   Prepayment  Charge  Payment  Amounts  in  connection  with  the
      Principal Prepayment of any of the Mortgage Loans.

      The foregoing  requirements for deposit in the Collection Account shall be
exclusive,  it being understood and agreed that, without limiting the generality
of the  foregoing,  payments  in the  nature of  Servicing  Fees,  late  payment
charges, assumption fees, insufficient funds charges and ancillary income (other
than Prepayment Charges) need not be deposited by the Servicer in the Collection
Account and may be retained by the Servicer as additional  compensation.  In the
event the  Servicer  shall  deposit  in the  Collection  Account  any amount not
required to be deposited  therein,  it may at any time withdraw such amount from
the Collection Account, any provision herein to the contrary notwithstanding.

      (b) On behalf of the Trust Fund, the Trustee shall  establish and maintain
one or more accounts  (such account or accounts,  the  "Distribution  Account"),
held in trust for the  benefit of the  Trustee  and the  Certificateholders.  On
behalf  of the  Trust  Fund,  the  Servicer  shall  deliver  to the  Trustee  in
immediately available funds for deposit in the Distribution Account on or before
1:00 p.m. New York time on the  Servicer  Remittance  Date,  that portion of the
Available Funds  (calculated  without regard to the references in the definition
thereof to amounts that may be withdrawn from the Distribution  Account) for the
related  Distribution Date then on deposit in the Collection Account, the amount
of all Prepayment  Charges collected during the applicable  Prepayment Period by
the Servicer and Servicer  Prepayment  Charge Payment Amounts in connection with
the  Principal  Prepayment  of any of the Mortgage  Loans then on deposit in the
Collection Account,  the amount of any funds reimbursable to an Advancing Person
pursuant  to Section  3.29  (unless  such  amounts are to be remitted in another
manner as  specified  in the  documentation  establishing  the  related  Advance
Facility).

      (c) Funds in the Collection  Account and the  Distribution  Account may be
invested in Permitted Investments in accordance with the provisions set forth in
Section 3.12.  The Servicer  shall give notice to the Trustee of the location of
the Collection Account maintained by it when established and prior to any change
thereof.  The Trustee shall give notice to the Servicer and the Depositor of the
location of the  Distribution  Account when  established and prior to any change
thereof.

      (d) Funds held in the  Collection  Account at any time may be delivered by
the  Servicer  to the  Trustee  for  deposit  in an  account  (which  may be the
Distribution Account and must satisfy the standards for the Distribution Account
as set forth in the  definition  thereof) and for all


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<PAGE>

purposes  of this  Agreement  shall  be  deemed  to be a part of the  Collection
Account;  provided,  however,  that the Trustee shall have the sole authority to
withdraw  any funds  held  pursuant  to this  subsection  (d).  In the event the
Servicer  shall deliver to the Trustee for deposit in the  Distribution  Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the  Distribution  Account and remit to it
any such  amount,  any  provision  herein to the  contrary  notwithstanding.  In
addition,  the  Servicer,  with respect to items (i) through  (iv) below,  shall
deliver to the Trustee  from time to time for  deposit,  and the  Trustee,  with
respect to items (i) through (iv) below,  shall so deposit,  in the Distribution
Account:

            (i) any Advances, as required pursuant to Section 4.04;

            (ii) any  amounts  required  to be  deposited  pursuant  to  Section
      3.23(d) or (f) in connection with any REO Property;

            (iii) any amounts to be paid by the  Servicer in  connection  with a
      purchase of Mortgage Loans and REO Properties pursuant to Section 10.01;

            (iv) any Compensating  Interest to be deposited  pursuant to Section
      3.24 in connection with any Prepayment Interest Shortfall; and

            (v) any amounts  required to be paid to the Trustee  pursuant to the
      Agreement, including, but not limited to Section 3.06 and Section 7.02.

      SECTION 3.11.  Withdrawals  from the Collection  Account and  Distribution
                     Account.

      (a) The  Servicer  shall,  from time to time,  make  withdrawals  from the
Collection  Account for any of the following purposes or as described in Section
4.04:

            (i) to remit to the Trustee for deposit in the Distribution  Account
      the  amounts  required to be so  remitted  pursuant to Section  3.10(b) or
      permitted  to be so  remitted  pursuant  to the first  sentence of Section
      3.10(d);

            (ii) subject to Section  3.16(d),  to reimburse the Servicer for (a)
      any  unreimbursed  Advances  to  the  extent  of  amounts  received  which
      represent  Late   Collections   (net  of  the  related   Servicing  Fees),
      Liquidation  Proceeds  and  Insurance  Proceeds on  Mortgage  Loans or REO
      Properties  with respect to which such  Advances  were made in  accordance
      with the provisions of Section 4.04; or (b) without  limiting any right of
      withdrawal set forth in clause (vi) below, any unreimbursed Advances that,
      upon a Final  Recovery  Determination  with respect to such Mortgage Loan,
      are Nonrecoverable  Advances, but only to the extent that Late Collections
      (net of the related  Servicing Fees),  Liquidation  Proceeds and Insurance
      Proceeds  received with respect to such Mortgage Loan are  insufficient to
      reimburse the Servicer for such unreimbursed Advances;

            (iii)  subject  to  Section  3.16(d),  to pay  the  Servicer  or any
      Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed Servicing
      Advances with respect to each


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<PAGE>

      Mortgage Loan, but only to the extent of any Late Collections, Liquidation
      Proceeds and  Insurance  Proceeds  received  with respect to such Mortgage
      Loan or REO Property, and (c) without limiting any right of withdrawal set
      forth in clause (vi) below, any Servicing  Advances made with respect to a
      Mortgage Loan that,  upon a Final Recovery  Determination  with respect to
      such Mortgage  Loan are  Nonrecoverable  Advances,  but only to the extent
      that  Late  Collections,   Liquidation  Proceeds  and  Insurance  Proceeds
      received with respect to such Mortgage Loan are  insufficient to reimburse
      the Servicer or any Sub-Servicer for Servicing Advances;

            (iv) to pay to the Servicer as additional servicing compensation (in
      addition  to the  Servicing  Fee)  on the  Servicer  Remittance  Date  any
      interest or investment  income earned on funds deposited in the Collection
      Account;

            (v) to pay itself or the Seller with respect to each  Mortgage  Loan
      that has previously been purchased or replaced pursuant to Section 2.03 or
      Section  3.16(c) all amounts  received  thereon  subsequent to the date of
      purchase or substitution, as the case may be;

            (vi) to reimburse the Servicer for any Advance or Servicing  Advance
      previously  made which the Servicer has determined to be a  Nonrecoverable
      Advance in accordance with the provisions of Section 4.04;

            (vii) to pay, or to reimburse the Servicer for Servicing Advances in
      respect  of,  expenses  incurred  in  connection  with any  Mortgage  Loan
      pursuant to Section 3.16(b);

            (viii)  to  reimburse  the  Servicer  for  expenses  incurred  by or
      reimbursable to the Servicer pursuant to Section 6.03;

            (ix) to pay itself any Prepayment Interest Excess;

            (x) to reimburse  itself for expenses  incurred  pursuant to Section
      9.01(c)(i); and

            (xi) to clear and  terminate  the  Collection  Account  pursuant  to
      Section 10.01.

      The foregoing  requirements  for withdrawal  from the  Collection  Account
shall be exclusive.  In the event the Servicer  shall deposit in the  Collection
Account any amount not  required  to be  deposited  therein,  it may at any time
withdraw such amount from the Collection  Account,  any provision  herein to the
contrary notwithstanding.

      The Servicer shall keep and maintain  separate  accounting,  on a Mortgage
Loan by Mortgage Loan basis,  for the purpose of justifying any withdrawal  from
the Collection  Account,  to the extent held by or on behalf of it,  pursuant to
subclauses  (ii),  (iii),  (iv),  (v), (vi) and (vii) above.  The Servicer shall
provide written  notification to the Trustee, on or prior to the next succeeding
Servicer  Remittance  Date,  upon  making any  withdrawals  from the  Collection
Account pursuant to subclause (vi) above; provided that an Officers' Certificate
in the form  described  under  Section  4.04(d)  shall  suffice for such written
notification to the Trustee in respect hereof.


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<PAGE>

      (b) The  Trustee  shall,  from  time to time,  make  withdrawals  from the
Distribution Account, for any of the following purposes, without priority:

            (i) to make distributions in accordance with Section 4.01;

            (ii)  to pay  itself  the  Trustee  Fee  and  reimbursable  expenses
      pursuant to Section 8.05;

            (iii) to pay any  amounts in respect  of taxes  pursuant  to Section
      9.01(g);

            (iv) to clear and terminate  the  Distribution  Account  pursuant to
      Section 10.01;

            (v) to pay any amounts  required to be paid to the Trustee  pursuant
      to this Agreement,  including but not limited to funds required to be paid
      pursuant to Section  2.01,  Section 3.06,  Section 4.01,  Section 7.02 and
      Section 8.05;

            (vi) to pay to the Trustee, any interest or investment income earned
      on funds deposited in the Distribution Account; and

            (vii) to pay to an  Advancing  Person  reimbursements  for  Advances
      and/or Servicing Advances pursuant to Section 3.29.

      SECTION  3.12.  Investment  of Funds  in the  Collection  Account  and the
                      Distribution Account.

      (a) The Servicer may direct any  depository  institution  maintaining  the
Collection  Account  and any REO  Account to invest the funds on deposit in such
accounts  and the  Trustee  may invest the funds on deposit in the  Distribution
Account  (each  such  account,  for  the  purposes  of  this  Section  3.12,  an
"Investment Account"). All investments pursuant to this Section 3.12 shall be in
one or more Permitted  Investments  bearing interest or sold at a discount,  and
maturing,  unless  payable  on  demand,  (i) no  later  than  the  Business  Day
immediately  preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor  thereon or if such  investment is managed or advised by a Person
other than the Trustee or an Affiliate  of the  Trustee,  and (ii) no later than
the date on which such funds are  required  to be  withdrawn  from such  account
pursuant to this  Agreement,  if the  Trustee is the obligor  thereon or if such
investment  is  managed or advised  by the  Trustee or any  Affiliate  or if the
Trustee or any  Affiliate  of the  Trustee is the  Custodian,  sub-custodian  or
administrator.  All such Permitted Investments shall be held to maturity, unless
payable on demand.  Any  investment of funds in an  Investment  Account shall be
made in the name of the Trustee (in its  capacity as such),  or in the name of a
nominee of the Trustee. The Trustee shall be entitled to sole possession (except
with respect to investment direction of funds held in the Collection Account and
any REO  Account,  and any  income  and gain  realized  thereon)  over each such
investment,  and  any  certificate  or  other  instrument  evidencing  any  such
investment  shall be  delivered  directly to the Trustee or its agent,  together
with any document of transfer  necessary to transfer title to such investment to
the Trustee or its  nominee.  In the event  amounts on deposit in an  Investment
Account are at any time  invested in a Permitted  Investment  payable on demand,
the Trustee shall:


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<PAGE>


            (x)  consistent  with any notice  required  to be given  thereunder,
      demand  that  payment  thereon  be made on the  last  day  such  Permitted
      Investment may otherwise mature hereunder in an amount equal to the lesser
      of (1) all amounts then payable  thereunder and (2) the amount required to
      be withdrawn on such date; and

            (y) demand  payment of all  amounts  due  thereunder  promptly  upon
      determination by a Responsible  Officer of the Trustee that such Permitted
      Investment would not constitute a Permitted Investment in respect of funds
      thereafter on deposit in the Investment Account.

      (b) All income and gain realized from the investment of funds deposited in
the Collection  Account and any REO Account held by or on behalf of the Servicer
shall be for the benefit of the Servicer and shall be subject to its  withdrawal
in accordance  with Section 3.11 or Section 3.23,  as  applicable.  The Servicer
shall deposit in the Collection Account or any REO Account,  as applicable,  the
amount  of any loss of  principal  incurred  in  respect  of any such  Permitted
Investment made with funds in such Account  immediately upon realization of such
loss.

      (c) All income and gain realized from the investment of funds deposited in
the  Distribution  Account shall be for the benefit of the Trustee.  The Trustee
shall  deposit in the  Distribution  Account the amount of any loss of principal
incurred  in respect of any such  Permitted  Investment  made with funds in such
Account   immediately  upon  realization  of  such  loss.   Notwithstanding  the
foregoing,  the Trustee may at its discretion,  and without liability,  hold the
funds in the Distribution Account uninvested.

      (d) Except as  otherwise  expressly  provided  in this  Agreement,  if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default  occurs  in any  other  performance  required  under any  Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of  Certificates  representing  more than 50% of
the Voting Rights allocated to any Class of Certificates, shall take such action
as may be  appropriate  to enforce such payment or  performance,  including  the
institution and prosecution of appropriate proceedings.

      SECTION 3.13. [Reserved].

      SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and
                    Fidelity Coverage.

      (a) The  Servicer  shall cause to be  maintained  for each  Mortgage  Loan
hazard insurance with extended  coverage on the Mortgaged  Property in an amount
which is at least  equal to the lesser of (i) the current  Principal  Balance of
such Mortgage  Loan and (ii) the amount  necessary to fully  compensate  for any
damage  or loss to the  improvements  that  are a part  of  such  property  on a
replacement  cost basis,  in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy.  The Servicer shall also cause to be maintained
hazard insurance with extended  coverage on each REO Property in an amount which
is at least  equal  to the  lesser  of (i) the  maximum  insurable  value of the
improvements  which  are a part  of  such  property  and  (ii)  the  outstanding
Principal  Balance  of the  related  Mortgage  Loan at the time it became an REO
Property. The Servicer will comply in the


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<PAGE>

performance of this Agreement with all reasonable rules and requirements of each
insurer  under any such  hazard  policies.  Any amounts to be  collected  by the
Servicer  under any such  policies  (other  than  amounts  to be  applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the  Mortgagor  in  accordance  with the  procedures  that the
Servicer  would follow in servicing  loans held for its own account,  subject to
the terms and  conditions  of the related  Mortgage and Mortgage  Note) shall be
deposited in the Collection  Account,  subject to withdrawal pursuant to Section
3.11, if received in respect of a Mortgage Loan, or in the REO Account,  subject
to  withdrawal  pursuant  to  Section  3.23,  if  received  in respect of an REO
Property.  Any cost incurred by the Servicer in  maintaining  any such insurance
shall not, for the purpose of calculating  distributions to  Certificateholders,
be  added  to the  unpaid  Principal  Balance  of  the  related  Mortgage  Loan,
notwithstanding that the terms of such Mortgage Loan so permit. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor  other than pursuant to such  applicable  laws and  regulations as
shall at any time be in force and as shall require such additional insurance. If
the Mortgaged  Property or REO Property is at any time in an area  identified in
the  Federal  Register  by the  Federal  Emergency  Management  Agency as having
special flood hazards and flood insurance has been made available,  the Servicer
will cause to be maintained a flood insurance  policy in respect  thereof.  Such
flood  insurance  shall be in an amount  equal to the  lesser of (i) the  unpaid
Principal  Balance of the related  Mortgage Loan and (ii) the maximum  amount of
such insurance  available for the related Mortgaged  Property under the national
flood insurance program (assuming that the area in which such Mortgaged Property
is located is participating in such program).

      In the event that the Servicer  shall obtain and maintain a blanket policy
insuring  against  hazard  losses  on  all  of  the  Mortgage  Loans,  it  shall
conclusively  be deemed to have  satisfied its  obligations  as set forth in the
first two sentences of this Section 3.14,  it being  understood  and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those  commercially  available and maintained by competent  servicers,  in which
case the Servicer  shall, in the event that there shall not have been maintained
on the related  Mortgaged  Property or REO Property a policy  complying with the
first two sentences of this Section 3.14,  and there shall have been one or more
losses which would have been covered by such policy,  deposit to the  Collection
Account from its own funds the amount not  otherwise  payable  under the blanket
policy because of such deductible  clause.  In connection with its activities as
servicer of the Mortgage Loans,  the Servicer agrees to prepare and present,  on
behalf of itself,  the  Depositor,  the Trustee and  Certificateholders,  claims
under any such blanket policy in a timely  fashion in accordance  with the terms
of such policy.

      (b) The Servicer  shall keep in force during the term of this  Agreement a
policy or policies of insurance covering errors and omissions for failure in the
performance of the Servicer's obligations under this Agreement,  which policy or
policies  shall be in such form and amount that would meet the  requirements  of
Fannie Mae or Freddie Mac if it were the purchaser of the Mortgage Loans, unless
the  Servicer  has  obtained a waiver of such  requirements  from  Fannie Mae or
Freddie Mac. The Servicer  shall also  maintain a fidelity  bond in the form and
amount that would meet the requirements of Fannie Mae or Freddie Mac, unless the
Servicer has obtained a waiver of such  requirements  from Fannie Mae or Freddie
Mac. The Servicer  shall be deemed to have  complied  with this  provision if an
Affiliate  of the  Servicer  has such errors and  omissions  and  fidelity  bond
coverage  and,  by the terms of such  insurance  policy or  fidelity  bond,  the
coverage afforded thereunder extends


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<PAGE>

to the Servicer. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable  without  thirty days' prior  written  notice to the
Trustee. The Servicer shall also cause each Sub-Servicer to maintain a policy of
insurance  covering  errors and  omissions  and a fidelity bond which would meet
such requirements.

      SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.

      The Servicer  will,  to the extent it has  knowledge of any  conveyance or
prospective  conveyance of any Mortgaged  Property by any Mortgagor  (whether by
absolute  conveyance  or by contract of sale,  and whether or not the  Mortgagor
remains or is to remain  liable  under the Mortgage  Note and/or the  Mortgage),
exercise its rights to  accelerate  the maturity of such Mortgage Loan under the
"due- on-sale" clause, if any, applicable thereto;  provided,  however, that the
Servicer  shall  not be  required  to take such  action if in its sole  business
judgment the Servicer believes it is not in the best interests of the Trust Fund
and shall not  exercise any such rights if  prohibited  by law from doing so. If
the Servicer  reasonably  believes it is unable under  applicable law to enforce
such  "due-on-sale"  clause,  or if any of the other conditions set forth in the
proviso  to the  preceding  sentence  apply,  the  Servicer  will  enter into an
assumption  and  modification  agreement  from or with the  person  to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person  becomes  liable under the Mortgage Note and, to the extent  permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized,  to the extent  permitted under the related  Mortgage Note, to enter
into a substitution of liability  agreement with such person,  pursuant to which
the original Mortgagor is released from liability and such person is substituted
as the Mortgagor and becomes  liable under the Mortgage  Note,  provided that no
such  substitution  shall be effective  unless such person satisfies the current
underwriting criteria of the Servicer for a mortgage loan similar to the related
Mortgage Loan. In connection with any assumption,  modification or substitution,
the Servicer shall apply such  underwriting  standards and follow such practices
and  procedures as shall be normal and usual in its general  mortgage  servicing
activities  and as it applies to other  mortgage  loans owned  solely by it. The
Servicer shall not take or enter into any assumption and modification agreement,
however,  unless (to the extent  practicable in the circumstances) it shall have
received  confirmation,  in  writing,  of  the  continued  effectiveness  of any
applicable hazard insurance policy. Any fee collected by the Servicer in respect
of an assumption,  modification or substitution of liability  agreement shall be
retained by the Servicer as  additional  servicing  compensation.  In connection
with any such  assumption,  no material term of the Mortgage Note (including but
not limited to the related  Mortgage Rate and the amount of the Monthly Payment)
may be amended or modified,  except as otherwise  required pursuant to the terms
thereof.  The  Servicer  shall  notify the Trustee  that any such  substitution,
modification  or assumption  agreement  has been  completed by forwarding to the
Trustee the executed original of such  substitution,  modification or assumption
agreement, which document shall be added to the related Mortgage File and shall,
for all purposes,  be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof.

      Notwithstanding  the  foregoing  paragraph or any other  provision of this
Agreement,  the  Servicer  shall not be deemed to be in  default,  breach or any
other  violation of its  obligations  hereunder by reason of any assumption of a
Mortgage  Loan by operation  of law or by the terms of the Mortgage  Note or any
assumption which the Servicer may be restricted by law from preventing,


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<PAGE>

for  any  reason  whatsoever.  For  purposes  of this  Section  3.15,  the  term
"assumption"  is  deemed  to also  include  a sale (of the  Mortgaged  Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.

      SECTION 3.16. Realization Upon Defaulted Mortgage Loans.

      (a) The Servicer shall use its  reasonable  efforts,  consistent  with the
Servicing  Standard,  to  foreclose  upon or  otherwise  comparably  convert the
ownership of  properties  securing  such of the Mortgage  Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent  payments  pursuant to Section 3.07.  Title to any such
property  shall be taken in the name of the  Trustee or its nominee on behalf of
the  Certificateholders  or in the name of the Servicer in  accordance  with the
Servicer's  customary  servicing practices and held for the benefit of the Trust
Fund, subject to applicable law. The Servicer shall be responsible for all costs
and expenses incurred by it in any such  proceedings;  provided,  however,  that
such  costs and  expenses  will be  recoverable  as  Servicing  Advances  by the
Servicer as  contemplated  in Section 3.11(a) and Section 3.23. The foregoing is
subject to the provision  that, in any case in which a Mortgaged  Property shall
have suffered damage from an Uninsured Cause, the Servicer shall not be required
to expend its own funds toward the  restoration of such property unless it shall
determine in its discretion that such  restoration will increase the proceeds of
liquidation of the related Mortgage Loan after  reimbursement to itself for such
expenses.

      (b) Notwithstanding  the foregoing  provisions of this Section 3.16 or any
other provision of this Agreement, with respect to any Mortgage Loan as to which
the Servicer  has received  actual  notice of, or has actual  knowledge  of, the
presence of any toxic or hazardous  substance on the related Mortgaged Property,
the  Servicer  shall not, on behalf of the  Trustee,  either (i) obtain title to
such  Mortgaged  Property as a result of or in lieu of foreclosure or otherwise,
or (ii) otherwise  acquire  possession of, or take any other action with respect
to, such Mortgaged  Property,  if, as a result of any such action,  the Trustee,
the Trust Fund or the  Certificateholders  would be considered to hold title to,
to be a "mortgagee-in-possession"  of, or to be an "owner" or "operator" of such
Mortgaged  Property  within  the  meaning  of  the  Comprehensive  Environmental
Response,  Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Servicer has also previously determined, based
on its  reasonable  judgment  and a report  prepared  by a Person who  regularly
conducts environmental audits using customary industry standards, that:

            (1)  such  Mortgaged  Property  is  in  compliance  with  applicable
      environmental  laws or,  if not,  that it  would  be in the best  economic
      interest of the Trust Fund to take such actions as are  necessary to bring
      the Mortgaged Property into compliance therewith; and

            (2) there are no  circumstances  present at such Mortgaged  Property
      relating to the use,  management or disposal of any hazardous  substances,
      hazardous  materials,  hazardous wastes, or petroleum-based  materials for
      which  investigation,   testing,  monitoring,   containment,  clean-up  or
      remediation  could be required  under any  federal,  state or local law or
      regulation,  or that if any such  materials  are  present  for which  such
      action could be required,  that it would be in the best economic  interest
      of the Trust  Fund to take  such  actions  with  respect  to the  affected
      Mortgaged Property.


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<PAGE>

      The cost of the  environmental  audit report  contemplated by this Section
3.16 shall be advanced by the Servicer,  subject to the  Servicer's  right to be
reimbursed   therefor  from  the  Collection  Account  as  provided  in  Section
3.11(a)(vii),  such  right  of  reimbursement  being  prior  to  the  rights  of
Certificateholders  to receive any amount in the Collection  Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.

      If the Servicer  determines,  as described  above,  that it is in the best
economic  interest of the Trust Fund to take such  actions as are  necessary  to
bring any such Mortgaged Property into compliance with applicable  environmental
laws,  or to take such  action  with  respect to the  containment,  clean-up  or
remediation of hazardous  substances,  hazardous materials,  hazardous wastes or
petroleum-based  materials  affecting  any  such  Mortgaged  Property,  then the
Servicer shall take such action as it deems to be in the best economic  interest
of the Trust Fund;  provided that any amounts disbursed by the Servicer pursuant
to this Section 3.16(b) shall constitute Servicing Advances,  subject to Section
4.04(d). The cost of any such compliance,  containment,  clean-up or remediation
shall  be  advanced  by the  Servicer,  subject  to the  Servicer's  right to be
reimbursed   therefor  from  the  Collection  Account  as  provided  in  Section
3.11(a)(vii),  such  right  of  reimbursement  being  prior  to  the  rights  of
Certificateholders  to receive any amount in the Collection  Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.

      (c) The Servicer  may, at its option,  purchase a Mortgage  Loan which has
become 90 or more days  delinquent or for which the Servicer has accepted a deed
in lieu of foreclosure.  Prior to purchase pursuant to this Section 3.16(c), the
Servicer  shall be required to  continue  to make  Advances  pursuant to Section
4.04. The Servicer shall not use any procedure in selecting Mortgage Loans to be
repurchased   which   is   materially   adverse   to   the   interests   of  the
Certificateholders. The Servicer shall purchase such delinquent Mortgage Loan at
a price equal to the Purchase  Price of such Mortgage Loan. Any such purchase of
a Mortgage  Loan  pursuant to this  Section  3.16(c)  shall be  accomplished  by
deposit in the Collection  Account of the amount of the Purchase Price. Upon the
satisfaction of the requirements set forth in Section 3.17(a), the Trustee shall
promptly deliver the Mortgage File and any related documentation to the Servicer
and will execute such  documents  provided to it as are  necessary to convey the
Mortgage Loan to the Servicer.

      (d) Proceeds received in connection with any Final Recovery Determination,
as well  as any  recovery  resulting  from a  partial  collection  of  Insurance
Proceeds,  Liquidation  Proceeds  or  condemnation  proceeds,  in respect of any
Mortgage Loan,  will be applied in the following  order of priority:  first,  to
unpaid Servicing Fees; second, to reimburse the Servicer or any Sub-Servicer for
any related unreimbursed Servicing Advances pursuant to Section 3.11(a)(iii) and
Advances pursuant to Section 3.11(a)(ii);  third, to accrued and unpaid interest
on the Mortgage Loan, to the date of the Final Recovery Determination, or to the
Due  Date  prior  to the  Distribution  Date on  which  such  amounts  are to be
distributed  if not in  connection  with a  Final  Recovery  Determination;  and
fourth,  as a recovery of  principal of the  Mortgage  Loan.  The portion of the
recovery  so  allocated  to unpaid  Servicing  Fees shall be  reimbursed  to the
Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).

      SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.


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      (a) Upon the payment in full of any Mortgage  Loan,  or the receipt by the
Servicer of a  notification  that  payment in full shall be escrowed in a manner
customary for such purposes,  the Servicer shall immediately  notify or cause to
be notified the Trustee by a certification and shall deliver to the Trustee,  in
written or electronic format,  which format is acceptable to the Custodian,  two
executed  copies of a Request for Release in the form of Exhibit E hereto (which
certification  shall include a statement to the effect that all amounts received
or to be received  in  connection  with such  payment  which are  required to be
deposited in the Collection  Account  pursuant to Section 3.10 have been or will
be so  deposited)  signed by a  Servicing  Officer  (or in a mutually  agreeable
electronic format that will, in lieu of a signature on its face,  originate from
a Servicing Officer) and shall request delivery to it of the Mortgage File. Upon
receipt of such  certification  and  request,  the Trustee  shall,  within three
Business  Days,  release  and send by  overnight  mail,  at the  expense  of the
Servicer or the related Mortgagor, the related Mortgage File to the Servicer. No
expenses  incurred in connection  with any instrument of satisfaction or deed of
reconveyance  shall be chargeable to the Collection  Account or the Distribution
Account.

      (b) From time to time and as appropriate  for the servicing or foreclosure
of any  Mortgage  Loan,  including,  for  this  purpose,  collection  under  any
insurance  policy  relating to the Mortgage Loans,  the Trustee shall,  upon any
request  made by or on behalf of the Servicer and delivery to the Trustee of two
executed copies of a written Request for Release in the form of Exhibit E hereto
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face,  originate from a Servicing  Officer),
release the related  Mortgage File to the Servicer  within three  Business Days,
and the Trustee shall, at the direction of the Servicer,  execute such documents
provided to it by the Servicer as shall be necessary to the  prosecution  of any
such proceedings. Such Request for Release shall obligate the Servicer to return
each and every  document  previously  requested  from the  Mortgage  File to the
Trustee  when the need  therefor by the  Servicer no longer  exists,  unless the
Mortgage Loan has been liquidated and the Liquidation  Proceeds  relating to the
Mortgage Loan have been deposited in the Collection Account or the Mortgage File
or such document has been  delivered to an attorney,  or to a public  trustee or
other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged  Property
either judicially or non-judicially,  and the Servicer has delivered,  or caused
to be delivered,  to the Trustee an additional Request for Release certifying as
to such  liquidation or action or proceedings.  Upon the request of the Trustee,
the Servicer  shall provide notice to the Trustee of the name and address of the
Person to which  such  Mortgage  File or such  document  was  delivered  and the
purpose or purposes of such delivery.  Upon receipt of a Request for Release, in
written  (with two  executed  copies) or  electronic  format,  from a  Servicing
Officer  stating that such  Mortgage  Loan was  liquidated  and that all amounts
received or to be received in connection with such liquidation that are required
to be deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO  Property,  such Mortgage Loan shall be released
by the Trustee to the Servicer or its designee within three Business Days.

      (c) Upon written  certification of a Servicing Officer,  the Trustee shall
execute and deliver to the  Servicer  or the  Sub-Servicer,  as the case may be,
copies of any court  pleadings,  requests for trustee's sale or other  documents
necessary  to the  foreclosure  or  trustee's  sale in  respect  of a  Mortgaged
Property or to any legal action brought to obtain judgment against any Mortgagor
on the  Mortgage  Note or Mortgage  or to obtain a  deficiency  judgment,  or to
enforce any other


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<PAGE>

remedies or rights  provided  by the  Mortgage  Note or  Mortgage  or  otherwise
available at law or in equity.  Each such certification  shall include a request
that such  pleadings  or documents be executed by the Trustee and a statement as
to the reason such  documents or pleadings  are required and that the  execution
and delivery  thereof by the Trustee will not invalidate or otherwise affect the
lien of the Mortgage,  except for the termination of such a lien upon completion
of the foreclosure or trustee's sale.

      SECTION 3.18. Servicing Compensation.

      As  compensation  for its  activities  hereunder,  the  Servicer  shall be
entitled to the Servicing Fee with respect to each Mortgage Loan payable  solely
from payments of interest in respect of such Mortgage  Loan,  subject to Section
3.24. In addition,  the Servicer shall be entitled to recover  unpaid  Servicing
Fees out of Insurance Proceeds, Liquidation Proceeds or condemnation proceeds to
the extent permitted by Section 3.11(a)(iii) and out of amounts derived from the
operation  and sale of an REO Property to the extent  permitted by Section 3.23.
Except as provided in Section  3.29,  the right to receive the Servicing Fee may
not be transferred in whole or in part except in connection with the transfer of
all of the Servicer's  responsibilities  and  obligations  under this Agreement;
provided,  however, that the Servicer may pay from the Servicing Fee any amounts
due to a Sub-Servicer  pursuant to a Sub-Servicing  Agreement entered into under
Section 3.02.

      Additional  servicing  compensation  in the form of assumption  fees, late
payment  charges,  insufficient  funds  charges,  ancillary  income or otherwise
(other than  Prepayment  Charges)  shall be retained by the Servicer only to the
extent such fees or charges are received by the  Servicer.  The  Servicer  shall
also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account and pursuant to Section  3.23(b) to withdraw  from any REO  Account,  as
additional servicing  compensation,  interest or other income earned on deposits
therein,  subject  to Section  3.12 and  Section  3.24.  The  Servicer  shall be
required to pay all expenses  incurred by it in  connection  with its  servicing
activities  hereunder  (including premiums for the insurance required by Section
3.14, to the extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer,  and servicing compensation of each Sub-Servicer) and shall not be
entitled to reimbursement therefor except as specifically provided herein.

      The Servicer shall be entitled to any Prepayment Interest Excess, which it
may withdraw from the Collection Account pursuant to Section 3.11(a)(ix).

      SECTION 3.19. Reports to the Trustee; Collection Account Statements.

      Not later than  twenty days after each  Distribution  Date,  the  Servicer
shall forward to the Trustee and the Depositor an account  statement  evidencing
the status of the collection account  reflecting  activity in the previous month
and an Officer's  Certificates shall accompany such account statement certifying
that the information contained in such account statement is true and correct.

      SECTION 3.20. Statement as to Compliance.

      The Servicer  will deliver to the Trustee and the Depositor not later than
March 20th of each calendar year,  commencing in 2005, an Officers'  Certificate
in the form attached hereto as


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<PAGE>

Exhibit  I  stating,  as to each  signatory  thereof,  that (i) a review  of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officers'  supervision and (ii) to
the best of such  officers'  knowledge,  based on such review,  the Servicer has
fulfilled all of its obligations under this Agreement  throughout such year, or,
if  there  has  been a  default  in the  fulfillment  of  any  such  obligation,
specifying  each such  default  known to such  officer and the nature and status
thereof.  Copies of any such  statement  shall be provided by the Trustee to any
Certificateholder  and to any Person  identified to the Trustee as a prospective
transferee  of a  Certificate,  upon  request at the  expense of the  requesting
party,  provided such statement is delivered by the Servicer to the Trustee.  In
addition to the foregoing, the Servicer will, to the extent reasonable, give any
other servicing  information  required by the Securities and Exchange Commission
pursuant to applicable law.

      SECTION 3.21. Independent Public Accountants' Servicing Report.

      Not later than March 20th of each calendar  year,  commencing in 2005, the
Servicer,  at  its  expense,   shall  cause  a  nationally  recognized  firm  of
independent  certified  public  accountants  to furnish to the Servicer a report
stating that (i) it has obtained a letter of  representation  regarding  certain
matters from the management of the Servicer which includes an assertion that the
Servicer has complied with certain minimum  residential  mortgage loan servicing
standards,  identified in the Uniform  Single  Attestation  Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with respect
to the  servicing  of  residential  mortgage  loans  during  the  most  recently
completed  calendar  year and (ii) on the basis of an  examination  conducted by
such firm in accordance with standards  established by the American Institute of
Certified  Public  Accountants,  such  representation  is  fairly  stated in all
material respects,  subject to such exceptions and other qualifications that may
be  appropriate.  In  rendering  its  report  such firm may rely,  as to matters
relating to the direct servicing of residential mortgage loans by Sub-Servicers,
upon comparable  reports of firms of independent  certified  public  accountants
rendered on the basis of  examinations  conducted  in  accordance  with the same
standards  (rendered  within  one year of such  report)  with  respect  to those
Sub-Servicers.  Immediately  upon  receipt of such report,  the  Servicer  shall
furnish a copy of such report to the Trustee and each Rating  Agency.  Copies of
such statement  shall be provided by the Trustee to any  Certificateholder  upon
request at the Servicer's expense,  provided that such statement is delivered by
the Servicer to the Trustee.

      SECTION  3.22.  Access to  Certain  Documentation;  Filing of  Reports  by
Trustee.

      (a) The Servicer  shall provide to the Office of Thrift  Supervision,  the
FDIC, and any other federal or state banking or insurance  regulatory  authority
that  may  exercise  authority  over  any   Certificateholder,   access  to  the
documentation  regarding  the Mortgage  Loans  required by  applicable  laws and
regulations.  Such  access  shall be  afforded  without  charge,  but only  upon
reasonable  request  and  during  normal  business  hours at the  offices of the
Servicer  designated by it. In addition,  access to the documentation  regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and to
any  Person  identified  to  the  Servicer  as  a  prospective  transferee  of a
Certificate, upon reasonable request during normal business hours at the offices
of the Servicer  designated by it, at the expense of the Person  requesting such
access.


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<PAGE>

      (b)(i) The Trustee and the Servicer  shall  reasonably  cooperate with the
Depositor in connection with the Trust's  satisfying the reporting  requirements
under the Securities  Exchange Act of 1934, as amended (the "Exchange Act"). The
Trustee  shall  prepare on behalf of the Trust any Forms 8-K and 10-K  customary
for  similar  securities  as  required  by the  Exchange  Act and the  Rules and
Regulations  of the  Securities  and  Exchange  Commission  thereunder,  and the
Depositor shall sign (or shall cause another entity acceptable to the Securities
and Exchange  Commission to sign) and the Trustee shall file (via the Securities
and Exchange  Commission's  Electronic Data Gathering and Retrieval System) such
forms on behalf of the Depositor (or such other  entity).  The Depositor  hereby
grants to the  Trustee a limited  power of  attorney to execute any Form 8-K and
file each such document on behalf of the Depositor. Such power of attorney shall
continue  until the earlier of (i) receipt by the Trustee from the  Depositor of
written  termination  of such power of attorney and (ii) the  termination of the
Trust.  Notwithstanding  anything herein to the contrary, the Depositor, and not
the Trustee,  shall be responsible  for executing each Form 10-K filed on behalf
of the Trust.

      (ii) Each Form 8-K shall be filed by the Trustee within 15 days after each
Distribution  Date, with a copy of the statement to the  Certificateholders  for
such  Distribution  Date as an exhibit thereto.  Subject to Section  3.22(b)(v),
prior to March 30th of each year (or such earlier date as may be required by the
Exchange  Act and the Rules  and  Regulations  of the  Securities  and  Exchange
Commission),  the Trustee  shall file a Form 10-K,  in  substance as required by
applicable law or applicable Security and Exchange  Commission  interpretations.
The Trustee  shall  prepare such Form 10-K and provide the  Depositor  with such
Form 10-K not later than March 20th of each year, subject to Section 3.22(b)(v).
Following its receipt  thereof,  the Depositor  shall execute such Form 10-K and
provide the  original of such Form 10-K to the Trustee not later than March 25th
(or, if the  applicable  March 25th is not a Business  Day, the next  succeeding
Business Day) of each year; provided,  however,  that if the filing of such Form
10-K shall be required to occur on a date  earlier  than March 30th of each year
as may be  required by the  Exchange  Act and the Rules and  Regulations  of the
Securities and Exchange  Commission,  then the time periods for  preparation and
execution  of such  Form  10-K set  forth  in this  sentence  shall be  adjusted
accordingly.  Such Form 10-K when filed shall include as exhibits the Servicer's
annual statement of compliance described under Section 3.20 and the accountant's
report  described  under Section 3.21, in each case to the extent they have been
timely  delivered  to the  Trustee.  If they are not so  timely  delivered,  the
Trustee  shall  file an  amended  Form 10-K,  at the  expense  of the  Servicer,
including  such  documents  as  exhibits  reasonably  promptly  after  they  are
delivered to the Trustee.  The Trustee  shall have no liability  with respect to
any failure to properly prepare or file such periodic reports  resulting from or
relating to the  Trustee's  inability or failure to obtain any  information  not
resulting  from its own  negligence or willful  misconduct.  The Form 10-K shall
also include a  certification  in the form  attached  hereto as Exhibit N-1 (the
"Certification"),  which shall be signed by the senior  officer of the Depositor
in charge of securitization.

      (iii) In addition,  (x) subject to Section  3.22(b)(v) hereof, the Trustee
shall sign a certification  (in the form attached hereto as Exhibit N-2) for the
benefit of the Depositor and its officers,  directors and  Affiliates  regarding
certain aspects of the Certification  (the "Trustee  Certification");  provided,
however,  that the Trustee shall not  undertake an analysis of the  accountant's
report  attached as an exhibit to the Form 10-K, and (y) the Servicer shall sign
a certification  (in the form attached hereto as Exhibit N-3) for the benefit of
the  Depositor,  the  Trustee  and  their  officers,  directors  and  Affiliates
regarding certain aspects of the Certification  (the "Servicer


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<PAGE>

Certification").  The Servicer Certification shall be delivered to the Depositor
and the  Trustee no later than March 20th or if such day is not a Business  Day,
the preceding Business Day, each year (subject to Section 3.22(b)(v) hereof).

      In  addition,  (A) the  Trustee  shall  indemnify  and hold  harmless  the
Depositor and its officers, directors and Affiliates from and against any actual
losses, damages, penalties,  fines, forfeitures,  reasonable and necessary legal
fees and related  costs,  judgments and other costs and expenses  arising out of
third party claims based upon a breach of the Trustee's  obligations  under this
Section  3.22(b)  or  any  material   misstatement   contained  in  the  Trustee
Certification,  other than as a result of incorrect  information provided to the
Trustee by the Servicer,  and (B) the Servicer shall indemnify and hold harmless
the  Depositor,  the  Trustee  and  their  respective  officers,  directors  and
Affiliates  from and  against  any actual  losses,  damages,  penalties,  fines,
forfeitures,  reasonable and necessary  legal fees and related costs,  judgments
and other costs and expenses  that such Person may sustain  arising out of third
party  claims  based  upon a breach of the  Servicer's  obligations  under  this
Section  3.22(b)(iii),  any material  misstatement or omission  contained in the
Servicer's Certification or any information correctly derived by the Trustee and
included in a Form 8-K or Form 10-K from information  provided to the Trustee by
the Servicer under this Agreement. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Depositor, then (i) the Trustee
agrees that it shall  contribute  to the amount paid or payable by the Depositor
as a result of the losses,  claims,  damages or  liabilities of the Depositor in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other and (ii) the  Servicer  agrees that
it shall  contribute  to the amount paid or payable by the Depositor as a result
of the  losses,  claims,  damages  or  liabilities  of  the  Depositor  in  such
proportion as is  appropriate  to reflect the relative fault of the Depositor on
the one hand and the Servicer on the other.

      (iv) Upon any filing with the  Securities  and  Exchange  Commission,  the
Trustee shall promptly  deliver to the Depositor a copy of any executed  report,
statement or information.

      (v) Prior to January 30 of the first year in which the  Trustee is able to
do so  under  applicable  law,  the  Trustee  shall  file a Form  15  Suspension
Notification with respect to the Trust.

      (vi) To the  extent  that,  following  the  Closing  Date,  the  Depositor
certifies  that reports and  certifications  differing from those required under
this Section 3.22(b) comply with the reporting  requirements  under the Exchange
Act,  the  Trustee  and the  Servicer  hereby  agree  that they will  reasonably
cooperate to amend the  provisions  of this  Section  3.22(b) in order to comply
with such  amended  reporting  requirements  and such  amendment of this Section
3.22(b);  provided,  however,  that the  Trustee  shall not be  responsible  for
executing any Form 10-K or the  Certification.  Any such amendment may result in
the reduction of the reports filed by the Depositor under the Exchange Act.

      SECTION 3.23. Title, Management and Disposition of REO Property.

      (a) The deed or certificate of sale of any REO Property shall,  subject to
applicable laws, be taken in the name of the Trustee,  or its nominee,  in trust
for the  benefit of the  Certificateholders  or in the name of the  Servicer  in
accordance with the Servicer's  customary  servicing  practices and held for the
benefit of the Trust Fund.  The  Servicer,  on behalf of REMIC


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<PAGE>

1, shall sell any REO Property as soon as practicable  and in any event no later
than the end of the third full taxable year after the taxable year in which such
REMIC acquires ownership of such REO Property for purposes of Section 860G(a)(8)
of the Code or request from the Internal Revenue Service,  no later than 60 days
before the day on which the three-year grace period would otherwise  expire,  an
extension of such three-year period, unless the Servicer shall have delivered to
the Trustee an Opinion of Counsel,  addressed to the Trustee and the  Depositor,
to the effect that the holding by the REMIC of such REO Property  subsequent  to
three years after its acquisition will not result in the imposition on the REMIC
of taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause any of the REMICs created hereunder to fail to qualify as a REMIC
under  Federal  law at any  time  that any  Certificates  are  outstanding.  The
Servicer shall manage,  conserve,  protect and operate each REO Property for the
Certificateholders  solely for the purpose of its prompt disposition and sale in
a  manner  which  does  not  cause  such  REO  Property  to fail to  qualify  as
"foreclosure  property" within the meaning of Section  860G(a)(8) of the Code or
result in the receipt by any of the REMICs created hereunder of any "income from
non-permitted  assets" within the meaning of Section  860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.

      (b) The Servicer  shall  separately  account for all funds  collected  and
received  in  connection  with  the  operation  of any REO  Property  and  shall
establish and maintain, or cause to be established and maintained,  with respect
to REO  Properties  an account  held in trust for the Trustee for the benefit of
the Certificateholders (the "REO Account"),  which shall be an Eligible Account.
The Servicer shall be permitted to allow the Collection  Account to serve as the
REO Account,  subject to separate  ledgers for each REO  Property.  The Servicer
shall be  entitled  to retain or  withdraw  any  interest  income  paid on funds
deposited in the REO Account.

      (c) The Servicer shall have full power and authority,  subject only to the
specific  requirements  and  prohibitions of this  Agreement,  to do any and all
things in connection  with any REO Property as are consistent with the manner in
which the Servicer  manages and operates  similar property owned by the Servicer
or any of its Affiliates,  all on such terms and for such period (subject to the
requirement of prompt  disposition set forth in Section 3.23(a)) as the Servicer
deems  to  be  in  the  best  interests  of  Certificateholders.  In  connection
therewith,  the  Servicer  shall  deposit,  or cause to be  deposited in the REO
Account,  in no event more than two Business Days after the  Servicer's  receipt
thereof,  all revenues  received by it with respect to an REO Property and shall
withdraw  therefrom  funds  necessary for the proper  operation,  management and
maintenance of such REO Property including, without limitation:

            (i) all  insurance  premiums  due and payable in respect of such REO
      Property;

            (ii) all real estate  taxes and  assessments  in respect of such REO
      Property that may result in the imposition of a lien thereon; and

            (iii) all costs and  expenses  necessary  to  maintain,  operate and
      dispose of such REO Property.

      To the extent that  amounts on deposit in the REO Account  with respect to
an REO  Property  are  insufficient  for the  purposes  set forth in clauses (i)
through (iii) above with respect to


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<PAGE>

such REO Property,  the Servicer shall advance from its own funds such amount as
is necessary  for such  purposes  if, but only if, the Servicer  would make such
advances  if the  Servicer  owned  the  REO  Property  and if in the  Servicer's
judgment,  the payment of such  amounts will be  recoverable  from the rental or
sale of the REO Property.

      Notwithstanding the foregoing, neither the Servicer nor the Trustee shall:

            (A) authorize the Trust Fund to enter into,  renew or extend any New
      Lease with respect to any REO Property, if the New Lease by its terms will
      give rise to any income that does not constitute Rents from Real Property;

            (B)  authorize  any amount to be received  or accrued  under any New
      Lease other than amounts that will constitute Rents from Real Property;

            (C) authorize any  construction on any REO Property,  other than the
      completion of a building or other  improvement  thereon,  and then only if
      more  than ten  percent  of the  construction  of such  building  or other
      improvement  was  completed  before  default on the related  Mortgage Loan
      became  imminent,  all within the meaning of Section  856(e)(4)(B)  of the
      Code; or

            (D) authorize any Person to Directly Operate any REO Property on any
      date more than 90 days after its date of acquisition by the Trust Fund;

unless,  in any such case,  the  Servicer  has  obtained  an Opinion of Counsel,
addressed to the Trustee, to the effect that such action will not cause such REO
Property  to fail to qualify as  "foreclosure  property"  within the  meaning of
Section  860G(a)(8)  of the Code at any time  that it is held by the  REMIC,  in
which case the Servicer  may take such actions as are  specified in such Opinion
of Counsel.

      The  Servicer  may  contract  with  any  Independent  Contractor  for  the
operation and management of any REO Property, provided that:

            (1) the  terms  and  conditions  of any such  contract  shall not be
      inconsistent herewith;

            (2) any such contract shall  require,  or shall be  administered  to
      require,  that the  Independent  Contractor  pay all  costs  and  expenses
      incurred in  connection  with the  operation  and  management  of such REO
      Property, including those listed above and remit all related revenues (net
      of such costs and expenses) to the Servicer as soon as practicable, but in
      no event  later than  thirty days  following  the receipt  thereof by such
      Independent Contractor;

            (3) none of the provisions of this Section  3.23(c)  relating to any
      such contract or to actions taken through any such Independent  Contractor
      shall  be  deemed  to  relieve  the  Servicer  of any of  its  duties  and
      obligations  to the  Trustee  on  behalf  of the  Certificateholders  with
      respect to the operation and management of any such REO Property; and


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            (4) the Servicer shall be obligated with respect thereto to the same
      extent as if it alone  were  performing  all  duties  and  obligations  in
      connection with the operation and management of such REO Property.

      The  Servicer  shall be  entitled  to enter  into any  agreement  with any
Independent  Contractor  performing  services  for it  related to its duties and
obligations  hereunder for  indemnification  of the Servicer by such Independent
Contractor,  and  nothing in this  Agreement  shall be deemed to limit or modify
such  indemnification.  The Servicer shall be solely liable for all fees owed by
it to any such  Independent  Contractor,  irrespective of whether the Servicer's
compensation  pursuant to Section 3.18 is sufficient to pay such fees; provided,
however,  that  to the  extent  that  any  payments  made  by  such  Independent
Contractor would  constitute  Servicing  Advances if made by the Servicer,  such
amounts shall be reimbursable as Servicing Advances made by the Servicer.

      (d) In addition to the withdrawals  permitted under Section  3.23(c),  the
Servicer may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in respect
of the related  Mortgage Loan; and (ii) to reimburse  itself or any Sub-Servicer
for  unreimbursed  Servicing  Advances and Advances  made in respect of such REO
Property or the related  Mortgage  Loan. On the Servicer  Remittance  Date,  the
Servicer shall withdraw from each REO Account  maintained by it and deposit into
the   Distribution   Account  in  accordance  with  Section   3.10(d)(ii),   for
distribution on the related  Distribution  Date in accordance with Section 4.01,
the income from the  related REO  Property  received  during the prior  calendar
month,  net of any withdrawals  made pursuant to Section 3.23(c) or this Section
3.23(d).

      (e) Subject to the time constraints set forth in Section 3.23(a), each REO
Disposition  shall be carried out by the Servicer in a manner, at such price and
upon such terms and  conditions  as shall be normal  and usual in the  Servicing
Standard.

      (f) The proceeds from the REO  Disposition,  net of any amount required by
law to be remitted to the Mortgagor  under the related  Mortgage Loan and net of
any payment or  reimbursement  to the Servicer or any  Sub-Servicer  as provided
above, shall be deposited in the Distribution Account in accordance with Section
3.10(d)(ii) on the Servicer  Remittance  Date in the month following the receipt
thereof for  distribution  on the related  Distribution  Date in accordance with
Section 4.01. Any REO Disposition  shall be for cash only (unless changes in the
REMIC  Provisions  made  subsequent  to the  Startup  Day allow a sale for other
consideration).

      (g) The  Servicer  shall  file  information  returns  with  respect to the
receipt  of  mortgage  interest  received  in a trade or  business,  reports  of
foreclosures  and  abandonments  of any Mortgaged  Property and  cancellation of
indebtedness  income with respect to any  Mortgaged  Property as required by the
Code.  Such  reports  shall  be in form  and  substance  sufficient  to meet the
reporting requirements of the Code.

      SECTION  3.24.  Obligations  of the  Servicer  in  Respect  of  Prepayment
                      Interest Shortfalls.

      Not later than 1:00 p.m. New York time on each Servicer  Remittance  Date,
the Servicer shall remit to the  Distribution  Account an amount  ("Compensating
Interest")  equal to the


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lesser  of (A) the  aggregate  of the  Prepayment  Interest  Shortfalls  for the
related  Distribution  Date and (B) its aggregate  Servicing Fee received in the
related Due Period.  The Servicer shall not have the right to reimbursement  for
any amounts  remitted to the Trustee in respect of Compensating  Interest.  Such
amounts so remitted  shall be included in the  Available  Funds and  distributed
therewith on the next Distribution  Date. The Servicer shall not be obligated to
pay Compensating Interest with respect to Relief Act Interest Shortfalls.

      SECTION 3.25. [Reserved].

      SECTION 3.26. Obligations of the Servicer in Respect of Mortgage Rates and
                    Monthly Payments.

      In the event that a  shortfall  in any  collection  on or  liability  with
respect to the Mortgage Loans in the aggregate  results from or is  attributable
to adjustments to Mortgage Rates,  Monthly Payments or Stated Principal Balances
that were made by the Servicer in a manner not consistent  with the terms of the
related  Mortgage  Note and this  Agreement,  the  Servicer,  upon  discovery or
receipt of notice thereof,  immediately shall deposit in the Collection  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  servicer
in respect of any such liability. Such indemnities shall survive the termination
or discharge of this Agreement. Notwithstanding the foregoing, this Section 3.26
shall not limit the ability of the Servicer to seek recovery of any such amounts
from the related  Mortgagor  under the terms of the related  Mortgage  Note,  as
permitted by law.

      SECTION 3.27. [Reserved].

      SECTION 3.28. [Reserved].

      SECTION 3.29. Advance Facility.

      The  Servicer  is hereby  authorized  to enter into a  financing  or other
facility  (any such  arrangement,  an  "Advance  Facility")  under which (1) the
Servicer  sells,  assigns  or  pledges to  another  Person  (together  with such
Person's  successors and assigns,  an "Advancing  Person") the Servicer's rights
under this  Agreement to be  reimbursed  for any Advances or Servicing  Advances
and/or  (2) an  Advancing  Person  agrees  to fund some or all  Advances  and/or
Servicing  Advances  required  to be  made  by the  Servicer  pursuant  to  this
Agreement.  No consent of the Depositor,  the Trustee, the Certificateholders or
any other party shall be required  before the Servicer may enter into an Advance
Facility.  The  Servicer  shall  notify  each other party to this  Agreement  in
writing  prior to or promptly  after  entering into or  terminating  any Advance
Facility  stating the  identity of the  Advancing  Person.  Notwithstanding  the
existence of any Advance Facility under which an Advancing Person agrees to fund
Advances and/or Servicing  Advances on the Servicer's behalf, the Servicer shall
remain  obligated  pursuant to this  Agreement to make  Advances  and  Servicing
Advances  pursuant to and as required by this Agreement.  If the Servicer enters
into  an  Advance  Facility,  and for so long  as an  Advancing  Person  remains
entitled to receive  reimbursement  for any  Advances  including  Nonrecoverable
Advances ("Advance  Reimbursement  Amounts") and/or Servicing Advances including
Nonrecoverable  Advances ("Servicing Advance Reimbursement Amounts" and together


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<PAGE>

with Advance Reimbursement  Amounts,  "Reimbursement  Amounts") (in each case to
the  extent  such  type of  Reimbursement  Amount  is  included  in the  Advance
Facility),  as applicable,  pursuant to this Agreement,  then the Servicer shall
identify, in the Officer's Certificate described in the next two sentences, such
Reimbursement  Amounts  consistent  with the  reimbursement  rights set forth in
Section 3.11(a)(ii),  (iii), (vi) and (vii) and remit such Reimbursement Amounts
in  accordance  with  Section  3.10(b)  or  otherwise  in  accordance  with  the
documentation establishing the Advance Facility to such Advancing Person or to a
trustee,  agent or custodian (an "Advance Facility Trustee")  designated by such
Advancing Person.  Notwithstanding the foregoing, if so required pursuant to the
terms of the Advance Facility,  the Servicer may direct,  and if so directed the
Trustee is hereby  authorized to and shall pay to the Advance  Facility  Trustee
the Reimbursement  Amounts identified pursuant to the preceding sentence. To the
extent that an Advancing Person funds any Advance and the Servicer  provides the
Trustee with an Officer's  Certificate that such Advancing Person is entitled to
reimbursement,  such Advancing Person shall be entitled to receive reimbursement
pursuant  to this  Agreement  for such  amount to the  extent  provided  in this
section.   Such   Officer's   Certificate   must   specify  the  amount  of  the
reimbursement,  the remittance  date, the Section of this Agreement that permits
the applicable Advance to be reimbursed and either the section(s) of the Advance
Facility that entitle the  Advancing  Person to request  reimbursement  from the
Trustee,  rather  than the  Servicer,  or proof  of an event of  default  by the
Servicer  under  the  Advance   Facility   entitling  the  Advancing  Person  to
reimbursement from the Trustee. Notwithstanding anything to the contrary herein,
in  no  event  shall  Advance   Reimbursement   Amounts  or  Servicing   Advance
Reimbursement  Amounts be  included in the  Available  Funds or  distributed  to
Certificateholders.

      Reimbursement  Amounts  shall  consist  solely of  amounts  in  respect of
Advances and/or  Servicing  Advances made with respect to the Mortgage Loans for
which the Servicer  would be permitted to reimburse  itself in  accordance  with
this  Agreement,  assuming  the  Servicer or the  Advancing  Person had made the
related Advance(s) and/or Servicing  Advance(s).  Notwithstanding the foregoing,
except with respect to reimbursement of Nonrecoverable  Advances as set forth in
this Agreement,  no Person shall be entitled to reimbursement from funds held in
the Collection Account for future distribution to Certificateholders pursuant to
this  Agreement.  None of the  Depositor  or the Trustee  shall have any duty or
liability with respect to the calculation of any Reimbursement  Amount and shall
be  entitled  to  rely,  without  independent  investigation,  on the  Officer's
Certificate  provided  pursuant to this Section 3.29, nor shall the Depositor or
the Trustee have any  responsibility  to track or monitor the  administration of
the Advance  Facility and the  Depositor  shall not have any  responsibility  to
track,  monitor or verify the  payment of  Reimbursement  Amounts to the related
Advancing  Person or Advance Facility  Trustee.  The Servicer shall maintain and
provide to any  successor  servicer  and (upon  request)  the Trustee a detailed
accounting on a loan by loan basis as to amounts  advanced by, sold,  pledged or
assigned to, and  reimbursed to any  Advancing  Person.  The successor  servicer
shall be entitled to rely on any such  information  provided by the  predecessor
servicer,  and the successor servicer shall not be liable for any errors in such
information. Any successor Servicer shall reimburse the predecessor Servicer and
itself for  outstanding  Advances and  Servicing  Advances,  respectively,  with
respect to each Mortgage Loan on a first in, first out ("FIFO") basis;  provided
that  the  successor  Servicer  has  received  prior  written  notice  from  the
predecessor  Servicer or the Advancing Person of  reimbursement  amounts owed to
the predecessor  Servicer.  Liquidation Proceeds with respect to a Mortgage Loan
shall be applied to reimburse Advances outstanding with respect to that Mortgage
Loan before  being  applied to reimburse  Servicing  Advances  outstanding  with
respect to that Mortgage Loan.


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<PAGE>

      An Advancing  Person who receives an assignment or pledge of the rights to
be reimbursed for Advances and/or Servicing  Advances,  and/or whose obligations
hereunder  are limited to the funding or purchase of Advances  and/or  Servicing
Advances  shall not be  required to meet the  criteria  for  qualification  of a
subservicer set forth in this Agreement.

      Upon the  direction  of and at the  expense of the  Servicer,  the Trustee
agrees to  execute  such  acknowledgments,  certificates,  and  other  documents
provided by the  Servicer  recognizing  the  interests  of any Advance  Facility
Trustee  in such  Reimbursement  Amounts  as the  Servicer  may cause to be made
subject to Advance Facilities pursuant to this Section 3.29.

      The Servicer  shall remain  entitled to be reimbursed for all Advances and
Servicing Advances funded by the Servicer to the extent the related rights to be
reimbursed  therefor  have not been sold,  assigned  or pledged to an  Advancing
Person.

      The Servicer  shall  indemnify the Depositor,  the Trustee,  any successor
servicer and the Trust Fund for any loss, liability or damage resulting from any
claim by the  related  Advancing  Person,  except to the extent that such claim,
loss, liability or damage resulted from or arose out of negligence, recklessness
or  willful  misconduct  or breach of its  duties  hereunder  on the part of the
Depositor, the Trustee or any successor servicer.

      Any  amendment  to this  Section  3.29 or to any other  provision  of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described  generally in this Section 3.29,  including  amendments to
add  provisions  relating to a successor  servicer,  may be entered  into by the
Trustee,   the   Depositor   and  the  Servicer   without  the  consent  of  any
Certificateholder,  provided such amendment  complies with Section 11.01 hereof.
All  reasonable  costs and expenses  (including  attorneys'  fees) of each party
hereto of any such  amendment  shall be borne solely by the  Servicer.  Prior to
entering  into an Advance  Facility,  the Servicer  shall  notify the  Advancing
Person in writing that: (a) the Advances and/or  Servicing  Advances  purchased,
financed by and/or pledged to the Advancing  Person are obligations  owed to the
Servicer on a  non-recourse  basis payable only from the cash flows and proceeds
received under this Agreement for  reimbursement  of Advances  and/or  Servicing
Advances only to the extent provided  herein,  and the Trustee and the Trust are
not  otherwise  obligated  or  liable  to repay any  Advances  and/or  Servicing
Advances financed by the Advancing Person and (b) the Trustee shall not have any
responsibility to calculate any Reimbursement Amounts or to track or monitor the
administration  of the Advance  Facility  between the Servicer and the Advancing
Person.


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                                   ARTICLE IV

                                  FLOW OF FUNDS

      SECTION 4.01. Distributions.

      (a)(I) On each Distribution Date, to the extent of funds on deposit in the
Distribution  Account,  the Trustee shall withdraw from the Distribution Account
that portion of Available  Funds for such  Distribution  Date  consisting of the
Interest  Remittance Amount for such  Distribution  Date, and make the following
disbursements  and transfers in the order of priority  described  below, in each
case  to the  extent  of the  Interest  Remittance  Amount  remaining  for  such
Distribution Date:

            (i) to the Holders of the Class A Certificates,  on a PRO RATA basis
      based  on the  entitlement  of  each  such  Class,  the  Monthly  Interest
      Distributable Amount and the Unpaid Interest Shortfall Amount, if any, for
      such Certificates;

            (ii) to the  Holders  of the Class  M-1  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (iii) to the  Holders  of the Class M-2  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (iv) to the  Holders  of the Class  M-3  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (v) to the  Holders  of the  Class  M-4  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (vi) to the  Holders  of the Class  M-5  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (vii) to the  Holders  of the Class M-6  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (viii) to the  Holders of the Class M-7  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (ix) to the  Holders  of the Class  M-8  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (x) to the  Holders  of the  Class  M-9  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates;

            (xi) to the  Holders  of the Class  B-1  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates; and


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<PAGE>

            (xii) to the  Holders  of the Class B-2  Certificates,  the  Monthly
      Interest Distributable Amount allocable to such Certificates.

      (b) On each  Distribution  Date (a) prior to the  Stepdown  Date or (b) on
which a Trigger  Event is in  effect,  to the  extent of funds on deposit in the
Distribution Account, distributions in respect of principal to the extent of the
Principal  Distribution  Amount shall be made in the following amounts and order
of priority:

            (i) first,  to the  Holders of the Class A  Certificates  (allocated
      among the Class A Certificates in the priority described below), until the
      Certificate Principal Balances thereof have been reduced to zero;

            (ii) second, to the Holders of the Class M-1 Certificates, until the
      Certificate Principal Balances thereof have been reduced to zero;

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

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

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

            (vi) sixth, to the Holders of the Class M-5 Certificates,  until the
      Certificate Principal Balance thereof has been reduced to zero;

            (vii) seventh,  to the Holders of the Class M-6 Certificates,  until
      the Certificate Principal Balance thereof has been reduced to zero;

            (viii) eighth, to the Holders of the Class M-7  Certificates,  until
      the Certificate Principal Balance thereof has been reduced to zero;

            (ix) ninth, to the Holders of the Class M-8 Certificates,  until the
      Certificate Principal Balance thereof has been reduced to zero;

            (x) tenth, to the Holders of the Class M-9  Certificates,  until the
      Certificate Principal Balance thereof has been reduced to zero;

            (xi) eleventh,  to the Holders of the Class B-1 Certificates,  until
      the Certificate Principal Balance thereof has been reduced to zero; and

            (xii) twelfth,  to the Holders of the Class B-2 Certificates,  until
      the Certificate Principal Balance thereof has been reduced to zero.


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<PAGE>

      (c) On each Distribution Date (a) on or after the Stepdown Date and (b) on
which a Trigger Event is not in effect, to the extent of funds on deposit in the
Distribution Account, distributions in respect of principal to the extent of the
Principal  Distribution  Amount shall be made in the following amounts and order
of priority:

            (i) first,  to the  Holders of the Class A  Certificates  (allocated
      among the Class A  Certificates  in the  priority  described  below),  the
      Senior  Principal  Distribution  Amount  until the  Certificate  Principal
      Balance thereof has been reduced to zero;

            (ii) second, to the Holders of the Class M-1 Certificates, the Class
      M-1 Principal Distribution Amount until the Certificate Principal Balances
      thereof have been reduced to zero;

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

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

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

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

            (vii)  seventh,  to the Holders of the Class M-6  Certificates,  the
      Class M-6 Principal  Distribution  Amount until the Certificate  Principal
      Balance thereof has been reduced to zero;

            (viii)  eighth,  to the Holders of the Class M-7  Certificates,  the
      Class M-7 Principal  Distribution  Amount until the Certificate  Principal
      Balance thereof has been reduced to zero;

            (ix) ninth, to the Holders of the Class M-8 Certificates,  the Class
      M-8 Principal  Distribution Amount until the Certificate Principal Balance
      thereof has been reduced to zero;

            (x) tenth, to the Holders of the Class M-9  Certificates,  the Class
      M-9 Principal  Distribution Amount until the Certificate Principal Balance
      thereof has been reduced to zero;

            (xi)  eleventh,  to the Holders of the Class B-1  Certificates,  the
      Class B-1 Principal  Distribution  Amount until the Certificate  Principal
      Balance thereof has been reduced to zero; and

            (xii)  twelfth,  to the Holders of the Class B-2  Certificates,  the
      Class B-2 Principal  Distribution  Amount until the Certificate  Principal
      Balance thereof has been reduced to zero.

      With respect to the Class A Certificates, all principal distributions will
be  distributed   sequentially,   first,   to  the  Holders  of  the  Class  A-1
Certificates, until the Certificate Principal Balance


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<PAGE>

of the Class A-1 Certificates has been reduced to zero,  second,  to the Holders
of the Class A-2  Certificates,  until the Certificate  Principal Balance of the
Class A-2 Certificates has been reduced to zero and third, to the Holders of the
Class A-3 Certificates, until the Certificate Principal Balance of the Class A-3
Certificates has been reduced to zero;  provided,  however,  on any Distribution
Date on which the  aggregate  Certificate  Principal  Balance  of the  Mezzanine
Certificates,  the Class B Certificates  and the Class C  Certificates  has been
reduced to zero,  notwithstanding anything contained herein to the contrary, all
distributions  of  principal  to the Class A  Certificates  will be  distributed
concurrently,  on a PRO RATA basis based on the Certificate Principal Balance of
each such Class.

      (d) On each  Distribution  Date,  to the extent of funds on deposit in the
Distribution  Account,  the Net Monthly Excess  Cashflow shall be distributed as
follows:

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

            (ii) to the  Holders  of the  Class M-1  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (iii) to the  Holders  of the Class M-1  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (iv) to the  Holders  of the  Class M-2  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (v) to the Holders of the Class M-2 Certificates, in an amount equal
      to the Allocated Realized Loss Amount allocable to such Certificates;

            (vi) to the  Holders  of the  Class M-3  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (vii) to the  Holders  of the Class M-3  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (viii) to the  Holders of the Class M-4  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (ix) to the  Holders  of the  Class M-4  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (x) to the Holders of the Class M-5 Certificates, in an amount equal
      to the Unpaid Interest Shortfall Amount allocable to such Certificates;


                                       97
<PAGE>

            (xi) to the  Holders  of the  Class M-5  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (xii) to the  Holders  of the Class M-6  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (xiii) to the  Holders of the Class M-6  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (xiv) to the  Holders  of the Class M-7  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (xv) to the  Holders  of the  Class M-7  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (xvi) to the  Holders  of the Class M-8  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (xvii) to the  Holders of the Class M-8  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (xviii) to the Holders of the Class M-9  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (xix) to the  Holders  of the Class M-9  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (xx) to the  Holders  of the  Class B-1  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (xxi) to the  Holders  of the Class B-1  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (xxii) to the  Holders of the Class B-2  Certificates,  in an amount
      equal  to  the  Unpaid  Interest   Shortfall   Amount  allocable  to  such
      Certificates;

            (xxiii) to the Holders of the Class B-2  Certificates,  in an amount
      equal  to  the   Allocated   Realized   Loss  Amount   allocable  to  such
      Certificates;

            (xxiv) to the Net WAC Rate Carryover Reserve Account,  the amount by
      which any Net WAC Rate Carryover Amounts for such Distribution Date exceed
      the amounts received by the Trustee under the Cap Contract;

            (xxv) to the  Holders of the Class C  Certificates,  (a) the Monthly
      Interest Distributable Amount and any Overcollateralization Release Amount
      for such  Distribution  Date and (b) on any Distribution Date on which the
      aggregate  Certificate Principal Balance


                                       98
<PAGE>

      of the Floating Rate  Certificates has been reduced to zero, any remaining
      amounts in reduction of the Certificate  Principal  Balance of the Class C
      Certificates,  until the  Certificate  Principal  Balance thereof has been
      reduced to zero;

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

            (xxvii)  any  remaining  amounts  to the  Holders  of  the  Residual
      Certificates  (in  respect  of the  Class  R-1  Interest,  the  Class  R-2
      Interest,   the  Class  R-3  Interest  or  the  Class  R-4  Interest,   as
      appropriate).

      Following  the foregoing  distributions,  an amount equal to the amount of
Subsequent  Recoveries deposited into the Collection Account pursuant to Section
3.10 shall be applied to increase the Certificate Principal Balance of the Class
of  Certificates  with the Highest  Priority  up to the extent of such  Realized
Losses  previously  allocated to that Class of Certificates  pursuant to Section
4.08. An amount equal to the amount of any remaining Subsequent Recoveries shall
be  applied  to  increase  the  Certificate  Principal  Balance  of the Class of
Certificates with the next Highest  Priority,  up to the amount of such Realized
Losses  previously  allocated to that Class of Certificates  pursuant to Section
4.08.  Holders of such  Certificates will not be entitled to any distribution in
respect of interest on the amount of such  increases  for any  Interest  Accrual
Period preceding the Distribution  Date on which such increase occurs.  Any such
increases  shall  be  applied  to the  Certificate  Principal  Balance  of  each
Certificate of such Class in accordance with its respective Percentage Interest.

      On each Distribution Date, after making the distributions of the Available
Funds as set  forth  above,  the  Trustee  will  withdraw  from the Net WAC Rate
Carryover  Reserve  Account,  to the  extent of  amounts  remaining  on  deposit
therein,  the amount of any Net WAC Rate Carryover Amount for such  Distribution
Date and distribute such amount in the following order of priority:

      (i) concurrently,  to each Class of Class A Certificates,  the related Cap
Amount, from payments made under the Cap Contract,  in each case up to a maximum
amount equal to the related Net WAC Rate Carryover Amount for such  Distribution
Date;

      (ii)  sequentially,  to the Class M-1,  Class M-2,  Class M-3,  Class M-4,
Class M-5,  Class M-6,  Class M-7, Class M-8, Class M-9, Class B-1 and Class B-2
Certificates,  in that order,  the related Cap Amount,  from payments made under
the Cap Contract,  in each case up to a maximum  amount equal to the related Net
WAC Rate Carryover Amount for such Distribution Date;

      (iii) concurrently, to each Class of Class A Certificates, the related Net
WAC Rate Carryover Amount remaining  undistributed pursuant to clause (i) above,
on a PRO RATA basis based on such  respective  remaining Net WAC Rate  Carryover
Amounts; and


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<PAGE>

      (iv)  sequentially,  to the Class M-1,  Class M-2,  Class M-3,  Class M-4,
Class M-5,  Class M-6,  Class M-7, Class M-8, Class M-9, Class B-1 and Class B-2
Certificates, in that order, the related Net WAC Rate Carryover Amount remaining
undistributed pursuant to clause (ii) above.

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

      (e) The Trustee shall make distributions in respect of a Distribution Date
to each  Certificateholder  of record on the related  Record Date (other than as
provided in Section 10.01  respecting  the final  distribution),  in the case of
Certificateholders of the Regular  Certificates,  by check or money order mailed
to such  Certificateholder at the address appearing in the Certificate Register,
or by wire transfer if such  Certificateholder  has provided to the Trustee wire
transfer  instructions  by  five  Business  Days  prior  to  such  Record  Date.
Distributions  among  Certificateholders  shall  be  made in  proportion  to the
Percentage    Interests   evidenced   by   the   Certificates   held   by   such
Certificateholders.

      (f) Each  distribution  with respect to a Book-Entry  Certificate shall be
paid to the  Depository,  which shall credit the amount of such  distribution to
the  accounts  of its  Depository  Participants  in  accordance  with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the  Certificate  Owners that it represents and to each indirect
participating  brokerage  firm (a  "brokerage  firm" or "indirect  participating
firm") for which it acts as agent.  Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents.  All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository  Participants in accordance with the provisions of
the Certificates.  None of the Trustee, the Depositor or the Servicer shall have
any responsibility therefor except as otherwise provided by applicable law.

      (g) Except as otherwise  provided in Section  10.01,  whenever the Trustee
expects that the final  distribution  with respect to any Class of  Certificates
will be made on the next Distribution Date, the Trustee shall, no later than two
days prior to the related  Distribution  Date, send, by overnight delivery or by
registered  mail,  to each Holder on such date of such Class of  Certificates  a
notice to the effect that:

            (i) the Trustee expects that the final  distribution with respect to
      the Certificates of such Class will be made on such  Distribution Date but
      only upon presentation and surrender of such Certificates at the office of
      the Trustee therein specified, and

            (ii) no interest  shall accrue on such  Certificates  from and after
      the end of the calendar month preceding such final Distribution Date.

      SECTION 4.02. [Reserved].


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      SECTION 4.03. Statements.

      (a) On each  Distribution  Date,  based,  as  applicable,  on  information
provided to it by the Servicer  pursuant to Sections 3.19 and 4.04,  the Trustee
shall prepare and make available to each Holder of the Regular Certificates, the
Servicer and the Rating Agencies,  a statement as to the  distributions  made on
such Distribution Date which shall include the following information:

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

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

            (iii)  the  Overcollateralized   Amount,  the  Overcollateralization
      Release Amount, the  Overcollateralization  Deficiency Amount (if any) and
      the  Overcollateralization  Target Amount as of such Distribution Date and
      the Excess  Overcollateralized  Amount (if any) for the Mortgage  Pool for
      such Distribution Date;

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

            (v) the aggregate amount of Advances for the related Due Period;

            (vi) the Pool  Balance  at the Close of  Business  at the end of the
      related Due Period;

            (vii) the  number,  aggregate  Stated  Principal  Balance,  weighted
      average  remaining term to maturity and weighted  average Mortgage Rate of
      the Mortgage Loans as of the related Determination Date;

            (viii) the number and aggregate unpaid Stated  Principal  Balance of
      Mortgage  Loans that were (A)  Delinquent  (exclusive of Mortgage Loans in
      bankruptcy or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60 to
      89 days and (3) 90 or more days, (B) as to which  foreclosure  proceedings
      have been  commenced and  Delinquent  (1) 30 to 59 days, (2) 60 to 89 days
      and (3) 90 or more days,  (C) in bankruptcy  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 and (D) REO Properties;

            (ix) [Reserved];

            (x) the total number and cumulative  Stated Principal Balance of all
      REO  Properties  as of  the  Close  of  Business  of the  last  day of the
      preceding Prepayment Period;


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

            (xii) the aggregate  amount of Realized  Losses  incurred during the
      related  Prepayment  Period and the cumulative  amount of Realized  Losses
      since the Closing Date and the aggregate  amount of Subsequent  Recoveries
      received during the related Prepayment Period and the cumulative amount of
      Subsequent Recoveries received since the Closing Date;

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

            (xiv)  the  Certificate  Principal  Balance  of  the  Floating  Rate
      Certificates  and the Class C  Certificates,  after  giving  effect to the
      distributions made on such Distribution Date;

            (xv) the Monthly  Interest  Distributable  Amount in respect of each
      Class of Floating Rate  Certificates and the Class C Certificates for such
      Distribution  Date and the Unpaid Interest  Shortfall Amount, if any, with
      respect to the Floating Rate Certificates and the Class C Certificates for
      such Distribution Date;

            (xvi) the aggregate amount of any Net Prepayment Interest Shortfalls
      for such Distribution Date;

            (xvii) the Credit Enhancement Percentage for such Distribution Date;

            (xviii) the Net WAC Rate Carryover Amount for each Class of Floating
      Rate  Certificates,  if any,  for such  Distribution  Date and the  amount
      remaining unpaid after reimbursements therefor on such Distribution Date;

            (xix) any  Overcollateralization  Target Amount,  Overcollateralized
      Amount and Overcollateralization  Deficiency Amount after giving effect to
      the distribution of principal on such Distribution Date;

            (xx) when the Stepdown Date or a Trigger Event has occurred;

            (xxi) the amount of Available Funds;

            (xxii) the respective Pass-Through Rates applicable to each Class of
      Floating  Rate   Certificates  and  the  Class  C  Certificates  for  such
      Distribution  Date and the  Pass-Through  Rate applicable to each Class of
      Floating Rate  Certificates  for the immediately  succeeding  Distribution
      Date; and

            (xxiii) payments, if any, received under the Cap Contract.

      The Trustee will make such statement  (and, at its option,  any additional
files containing the same information in an alternative  format)  available each
month to Certificateholders


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and  the  Rating  Agencies  via  the  Trustee's   internet  website  located  at
"http://www.jpmorgan.com/sfr."  Assistance  in using the website can be obtained
by calling the Trustee's customer service desk at 877-722-1095. Parties that are
unable to use the website  are  entitled to have a paper copy mailed to them via
first class mail by written notice to the Trustee at its Corporate Trust Office.
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 Servicer.  The foregoing  information shall be
reported to the Trustee each month on or before the Servicer Remittance Date.

      In the case of  information  furnished  pursuant to subclauses (i) through
(iii) above,  the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000  original  dollar amount as of
the Cut-off Date.

      (b)  Within a  reasonable  period of time  after the end of each  calendar
year, the Trustee shall, upon written request, furnish to each Person who at any
time during the calendar year was a Certificateholder  of a Regular Certificate,
if  requested  in writing by such  Person,  such  information  as is  reasonably
necessary to provide to such Person a statement  containing the  information set
forth in subclauses  (i) through (iii) above,  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 prepared and furnished
by the Trustee to Certificateholders pursuant to any requirements of the Code as
are in force from time to time.

      (c) On each  Distribution  Date,  the Trustee shall make  available to the
Residual  Certificateholders  a copy of the  reports  forwarded  to the  Regular
Certificateholders  in  respect  of  such  Distribution  Date  with  such  other
information as the Trustee deems necessary or appropriate.

      (d)  Within a  reasonable  period of time  after the end of each  calendar
year,  the  Trustee  shall  deliver to each  Person  who at any time  during the
calendar year was a Residual Certificateholder,  if requested in writing by such
Person, a statement containing the information provided pursuant to the previous
paragraph aggregated for such calendar year or applicable portion thereof during
which such  Person  was a Residual  Certificateholder.  Such  obligation  of the
Trustee shall be deemed to have been satisfied to the extent that  substantially
comparable  information shall be prepared and furnished to Certificateholders by
the  Trustee  pursuant to any  requirements  of the Code as from time to time in
force.

      SECTION 4.04. Remittance Reports; Advances.

      (a) On the second  Business Day following  each  Determination  Date,  the
Servicer shall deliver to the Trustee by telecopy or electronic mail (or by such
other  means as the  Servicer  and the  Trustee  may agree  from time to time) a
Remittance Report with respect to the related  Distribution Date. Not later than
the second  Business Day following each  Determination  Date, the Servicer shall
deliver or cause to be delivered  to the Trustee in addition to the  information
provided in the Remittance Report, such other information  reasonably  available
to it with respect to the Mortgage Loans as the Trustee may  reasonably  require
to perform the calculations necessary to make the distributions  contemplated by
Section 4.01 and to prepare the statements to Certificateholders


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contemplated by Section 4.03. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Servicer.

      (b) The amount of Advances to be made by the Servicer for any Distribution
Date  shall  equal,  subject to Section  4.04(d),  the sum of (i) the  aggregate
amount of Monthly  Payments (net of the related  Servicing  Fee), due during the
related Due Period in respect of the Mortgage Loans, which Monthly Payments were
delinquent  on a  contractual  basis as of the Close of  Business on the related
Determination  Date and  (ii)  with  respect  to each REO  Property,  which  REO
Property was acquired  during or prior to the related Due Period and as to which
REO Property an REO Disposition did not occur during the related Due Period,  an
amount  equal to the excess,  if any,  of the REO  Imputed  Interest on such REO
Property for the most recently  ended calendar  month,  over the net income from
such REO Property  transferred to the  Distribution  Account pursuant to Section
3.23 for distribution on such Distribution Date.

      On or before 1:00 p.m. New York time on the Servicer  Remittance Date, the
Servicer shall remit in immediately  available  funds to the Trustee for deposit
in the Distribution Account an amount equal to the aggregate amount of Advances,
if any, to be made in respect of the Mortgage  Loans and REO  Properties for the
related  Distribution  Date  either  (i)  from its own  funds  or (ii)  from the
Collection  Account, to the extent of funds held therein for future distribution
(in which case it will cause to be made an  appropriate  entry in the records of
the Collection  Account that amounts held for future  distribution have been, as
permitted  by this Section  4.04,  used by the Servicer in discharge of any such
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans and REO Properties.  Any amounts held for future  distribution used by the
Servicer to make an Advance as  permitted  in the  preceding  sentence  shall be
appropriately  reflected in the Servicer's  records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available  Funds for the related  Distribution  Date
(determined  without  regard to Advances to be made on the  Servicer  Remittance
Date)  shall be less than the total  amount  that  would be  distributed  to the
Classes of Certificateholders pursuant to Section 4.01 on such Distribution Date
if such  amounts  held  for  future  distributions  had not been so used to make
Advances.  The Trustee  will  provide  notice to the Servicer by telecopy by the
Close of Business on any Servicer  Remittance  Date in the event that the amount
remitted by the  Servicer to the Trustee on such date is less than the  Advances
required to be made by the Servicer for the related  Distribution  Date,  as set
forth in the related Remittance Report.

      (c) The  obligation  of the Servicer to make such  Advances is  mandatory,
notwithstanding  any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage  Loan,  shall continue until the Mortgage Loan
is paid in full or until all Liquidation  Proceeds  thereon have been recovered,
or a Final Recovery Determination has been made thereon.

      (d)  Notwithstanding  anything  herein  to the  contrary,  no  Advance  or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance  or  Servicing  Advance  would,  if made,  constitute  a  Nonrecoverable
Advance.  The  determination  by the Servicer that it has made a  Nonrecoverable
Advance  or that any  proposed  Advance or  Servicing  Advance,  if made,  would
constitute  a  Nonrecoverable  Advance,  shall  be  evidenced  by  an  Officers'
Certificate


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of the Servicer  delivered to the  Depositor and the Trustee.  Furthermore,  the
Servicer shall not be required to advance Relief Act Interest Shortfalls.

      SECTION 4.05. [Reserved].

      SECTION 4.06. Net WAC Rate Carryover Reserve Account.

      No later than the Closing Date,  the Trustee shall  establish and maintain
with itself a separate, segregated trust account titled, "Net WAC Rate Carryover
Reserve  Account,  JPMorgan  Chase  Bank,  as Trustee,  in trust for  registered
Holders of CHEC Loan Trust 2004-1,  Asset-Backed  Certificates,  Series 2004-1."
All amounts  deposited in the Net WAC Rate  Carryover  Reserve  Account shall be
distributed to the Holders of the Floating Rate  Certificates  in the manner set
forth in Section 4.01(d).

      On each  Distribution  Date as to which there is a Net WAC Rate  Carryover
Amount payable to the Floating Rate Certificates,  the Trustee has been directed
by the Class C  Certificateholders  to, and therefore will, deposit into the Net
WAC  Rate   Carryover   Reserve   Account  the  amounts   described  in  Section
4.01(d)(xxiv),   rather  than   distributing   such   amounts  to  the  Class  C
Certificateholders.  In addition, any payments received by the Trustee under the
Cap Contract on each  Distribution  Date will be deposited into the Net WAC Rate
Carryover  Reserve Account.  On each such  Distribution  Date, the Trustee shall
hold all such  amounts  for the  benefit  of the  Holders of the  Floating  Rate
Certificates,  and will  distribute  such amounts to the Holders of the Floating
Rate Certificates in the amounts and priorities set forth in Section 4.01(d).

      On each  Distribution  Date,  any  amounts  remaining  in the Net WAC Rate
Reserve  Account after the payment of any Net WAC Rate Carryover  Amounts on the
Floating Rate Certificates for such  Distribution  Date, shall be payable to the
Servicer.

      For federal and state income tax purposes,  the Servicer will be deemed to
be the  owner  of the  Net WAC  Rate  Carryover  Reserve  Account.  All  amounts
deposited  into the Net WAC Rate Carryover  Reserve  Account (other than amounts
received  under the Cap  Contract)  shall be treated as amounts  distributed  by
REMIC 2 to the  Holder of the Class C  Interest  and by REMIC 3 to the Holder of
the Class C Certificates.  The Net WAC Rate Carryover Reserve Account will be an
"outside  reserve  fund"  within the  meaning  of  Treasury  regulation  Section
1.860G-2(h).  Upon the  termination of the Trust,  or the payment in full of the
Floating Rate Certificates, all amounts remaining on deposit in the Net WAC Rate
Carryover  Reserve  Account will be released by the Trust and distributed to the
Servicer or its designee.  The Net WAC Rate  Carryover  Reserve  Account will be
part of the Trust but not part of any REMIC and any  payments  to the Holders of
the Floating Rate  Certificates  of Net WAC Rate  Carryover  Amounts will not be
payments  with respect to a "regular  interest" in a REMIC within the meaning of
Code Section 860(G)(a)(1).

      By accepting a Class C Certificate,  each Class C Certificateholder hereby
agrees to direct the Trustee,  and the Trustee  hereby is  directed,  to deposit
into the Net WAC Rate Carryover  Reserve Account the amounts  described above on
each  Distribution  Date as to which there is any Net WAC Rate Carryover  Amount
rather than  distributing  such  amounts to the Class C  Certificateholders.  By
accepting a Class C Certificate,  each Class C Certificateholder  further agrees


                                      105
<PAGE>

that such  direction is given for good and valuable  consideration,  the receipt
and sufficiency of which is acknowledged by such acceptance.

      Amounts on deposit in the Net WAC Rate  Carryover  Reserve  Account  shall
remain uninvested.

      For federal  tax return and  information  reporting,  the  purchase  price
allocated  to the Cap Contract in respect of any Net WAC Rate  Carryover  Amount
may be obtained from the Trustee, upon receipt from the Depositor.

      SECTION 4.07. Distributions on the REMIC 1 Regular Interests.

      (a) On each  Distribution  Date,  the Trustee shall cause in the following
order of priority, the following amounts which shall be deemed to be distributed
by REMIC 1 to REMIC 2 on account of the REMIC 1 Regular  Interests  or withdrawn
from the  Distribution  Account  and  distributed  to the holders of the Class R
Certificates (in respect of the Class R-1 Interest), as the case may be:

            (i) first,  to the extent of Available  Funds, to Holders of REMIC 1
      Regular  Interest LTAA,  REMIC 1 Regular  Interest  LTA1,  REMIC 1 Regular
      Interest LTA2,  REMIC 1 Regular  Interest LTA3,  REMIC 1 Regular  Interest
      LTM1,  REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC
      1 Regular  Interest LTM4,  REMIC 1 Regular  Interest LTM5, REMIC 1 Regular
      Interest LTM6,  REMIC 1 Regular  Interest LTM7,  REMIC 1 Regular  Interest
      LTM8,  REMIC 1 Regular Interest LTM9, REMIC 1 Regular Interest LTB1, REMIC
      1 Regular Interest LTB2, REMIC 1 Regular Interest LTZZ and REMIC 1 Regular
      Interest  LTP,  on a PRO  RATA  basis,  in an  amount  equal  to  (A)  the
      Uncertificated  Accrued Interest for such Distribution  Date, plus (B) any
      amounts in respect  thereof  remaining  unpaid from previous  Distribution
      Dates.  Amounts payable as  Uncertificated  Accrued Interest in respect of
      REMIC 1 Regular Interest LTZZ shall be reduced and deferred when the REMIC
      1    Overcollateralization    Amount    is   less   than   the   REMIC   1
      Overcollateralization  Target  Amount,  by the lesser of (x) the amount of
      such  difference  and  (y) the  Maximum  Uncertificated  Accrued  Interest
      Deferral  Amount and such amount will be payable to the Holders of REMIC 1
      Regular  Interest LTA1,  REMIC 1 Regular  Interest  LTA2,  REMIC 1 Regular
      Interest LTA3,  REMIC 1 Regular  Interest LTM1,  REMIC 1 Regular  Interest
      LTM2,  REMIC 1 Regular Interest LTM3, REMIC 1 Regular Interest LTM4, REMIC
      1 Regular  Interest LTM5,  REMIC 1 Regular  Interest LTM6, REMIC 1 Regular
      Interest LTM7,  REMIC 1 Regular  Interest LTM8,  REMIC 1 Regular  Interest
      LTM9,  REMIC 1 Regular  Interest LTB1 and REMIC 1 Regular Interest LTB2 in
      the same  proportion  as the  Overcollateralization  Deficiency  Amount is
      allocated  to  the  Corresponding   Certificates  and  the  Uncertificated
      Principal  Balance of the REMIC 1 Regular Interest LTZZ shall be increased
      by such amount; and

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


                                      106
<PAGE>

                  (a) 98.00% of such remainder to the Holders of REMIC 1 Regular
            Interest  LTAA  and  REMIC  1  Regular   Interest  LTP,   until  the
            Uncertificated  Principal  Balance  of such  Uncertificated  REMIC 1
            Regular Interest is reduced to zero; provided, however, that REMIC 1
            Regular  Interest  LTP shall not be reduced  until the  Distribution
            Date immediately  following the expiration of the latest  Prepayment
            Charge  as  identified  on the  Prepayment  Charge  Schedule  or any
            Distribution  Date  thereafter,  at which point such amount shall be
            distributed  to REMIC 1 Regular  Interest  LTP,  until $100 has been
            distributed pursuant to this clause;

                  (b) 2.00 % of such remainder,  first to the Holders of REMIC 1
            Regular  Interest  LTA1,  REMIC 1  Regular  Interest  LTA2,  REMIC 1
            Regular  Interest  LTA3,  REMIC 1  Regular  Interest  LTM1,  REMIC 1
            Regular  Interest  LTM2,  REMIC 1  Regular  Interest  LTM3,  REMIC 1
            Regular  Interest  LTM4,  REMIC 1  Regular  Interest  LTM5,  REMIC 1
            Regular  Interest  LTM6,  REMIC 1  Regular  Interest  LTM7,  REMIC 1
            Regular  Interest  LTM8,  REMIC 1  Regular  Interest  LTM9,  REMIC 1
            Regular  Interest LTB1 and REMIC 1 Regular  Interest LTB2,  equal to
            1.00%  of and in the  same  proportion  as  principal  payments  are
            allocated   to   the   Corresponding    Certificates,    until   the
            Uncertificated  Principal Balances of such REMIC 1 Regular Interests
            are  reduced to zero and  second,  to the Holders of REMIC 1 Regular
            Interest LTZZ, until the  Uncertificated  Principal  Balance of such
            REMIC 1 Regular Interest is reduced to zero; and

                  (d)  any  remaining  amount  to the  Holders  of the  Class  R
            Certificates (in respect of the Class R-2 Interest);

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an  Overcollateralization  Release Amount shall be allocated
to Holders  of (i) REMIC 1 Regular  Interest  LTAA and REMIC 1 Regular  Interest
LTP,  in that  order  and (ii)  REMIC 1  Regular  Interest  LTZZ,  respectively;
provided  that  REMIC 1 Regular  Interest  LTP shall  not be  reduced  until the
Distribution Date immediately  following the expiration of the latest Prepayment
Charge as identified on the Prepayment  Charge Schedule or any Distribution Date
thereafter,  at which point such amount shall be  distributed to REMIC 1 Regular
Interest LT1P, until $100 has been distributed pursuant to this clause.

      SECTION 4.08. Allocation of Realized Losses.

      (a) All  Realized  Losses on the Mortgage  Loans  allocated to any Regular
Certificate  shall be  allocated  by the  Trustee on each  Distribution  Date as
follows:  first,  to  Net  Monthly  Excess  Cashflow;  second,  to the  Class  C
Certificates,  until the Certificate  Principal Balance thereof has been reduced
to zero; third, to the Class B-2 Certificates,  until the Certificate  Principal
Balance thereof has been reduced to zero; fourth, to the Class B-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-9 Certificates,  until the Certificate  Principal Balance thereof
has been  reduced  to zero;  sixth,  to the  Class M-8  Certificates,  until the
Certificate  Principal Balance thereof has been reduced to zero; seventh, to the
Class M-7 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero;  eighth, to the Class M-6  Certificates,  until the Certificate
Principal Balance thereof has been reduced to zero;


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ninth, to the Class M-5  Certificates,  until the Certificate  Principal Balance
thereof has been reduced to zero;  tenth, to the Class M-4  Certificates,  until
the Certificate Principal Balance thereof has been reduced to zero; eleventh, to
the Class M-3 Certificates,  until the Certificate Principal Balance thereof has
been  reduced  to zero;  twelfth,  to the  Class  M-2  Certificates,  until  the
Certificate  Principal Balance thereof has been reduced to zero; and thirteenth,
to the Class M-1 Certificates,  until the Certificate  Principal Balance thereof
has been reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual  distributions  to be made on such date as provided above.  All
references  above  to  the  Certificate   Principal  Balance  of  any  Class  of
Certificates  shall  be to the  Certificate  Principal  Balance  of  such  Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date.

      Any  allocation  of  Realized  Losses to a  Mezzanine  Certificate  on any
Distribution  Date shall be made by reducing the Certificate  Principal  Balance
thereof by the amount so allocated; any allocation of Realized Losses to a Class
C Certificates shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.01(d)(xxv).  No allocations of any Realized Losses
shall be made to the Certificate  Principal Balances of the Class A Certificates
or the Class P Certificates.

      (b) All Realized Losses on the Mortgage Loans shall be deemed to have been
allocated in the specified  percentages,  as follows:  first, to  Uncertificated
Accrued  Interest  payable  to the  REMIC 1  Regular  Interest  LTAA and REMIC 1
Regular  Interest  LTZZ up to an aggregate  amount equal to the REMIC 1 Interest
Loss Allocation Amount, 98% and 2%, respectively;  second, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTAA and REMIC 1 Regular Interest
LTZZ up to an aggregate  amount equal to the REMIC 1 Principal  Loss  Allocation
Amount,  98%  and  2%,  respectively;  third,  to the  Uncertificated  Principal
Balances of REMIC 1 Regular  Interest  LTAA,  REMIC 1 Regular  Interest LTB2 and
REMIC  1  Regular  Interest  LTZZ,  98%,  1% and  1%,  respectively,  until  the
Uncertificated  Principal  Balance  of REMIC 1  Regular  Interest  LTB2 has been
reduced to zero;  fourth, to the  Uncertificated  Principal  Balances of REMIC 1
Regular  Interest  LTAA,  REMIC 1  Regular  Interest  LTB1 and  REMIC 1  Regular
Interest LTZZ, 98%, 1% and 1%, respectively,  until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LTB1 has been reduced to zero; fifth, to the
Uncertificated  Principal  Balances of REMIC 1 Regular  Interest  LTAA,  REMIC 1
Regular  Interest  LTM9 and  REMIC 1  Regular  Interest  LTZZ,  98%,  1% and 1%,
respectively,  until the  Uncertificated  Principal  Balance  of REMIC 1 Regular
Interest LTM9 has been reduced to zero; sixth, to the  Uncertificated  Principal
Balances of REMIC 1 Regular  Interest  LTAA,  REMIC 1 Regular  Interest LTM8 and
REMIC  1  Regular  Interest  LTZZ,  98%,  1% and  1%,  respectively,  until  the
Uncertificated  Principal  Balance  of REMIC 1  Regular  Interest  LTM8 has been
reduced to zero;  seventh,  to the Uncertificated  Principal Balances of REMIC 1
Regular  Interest  LTAA,  REMIC 1  Regular  Interest  LTM7 and  REMIC 1  Regular
Interest LTZZ, 98%, 1% and 1%, respectively,  until the Uncertificated Principal
Balance of REMIC 1 Regular  Interest LTM7 has been reduced to zero;  eighth,  to
the Uncertificated  Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1
Regular  Interest  LTM6 and  REMIC 1  Regular  Interest  LTZZ,  98%,  1% and 1%,
respectively,  until the  Uncertificated  Principal  Balance  of REMIC 1 Regular
Interest LTM6 has been reduced to zero; ninth, to the  Uncertificated  Principal
Balances of REMIC 1 Regular  Interest  LTAA,  REMIC 1 Regular  Interest LTM5 and
REMIC  1  Regular  Interest  LTZZ,  98%,  1% and  1%,  respectively,  until  the
Uncertificated  Principal  Balance  of REMIC 1  Regular  Interest  LTM5 has been


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reduced to zero;  tenth,  to the  Uncertificated  Principal  Balances of REMIC 1
Regular  Interest  LTAA,  REMIC 1  Regular  Interest  LTM4 and  REMIC 1  Regular
Interest LTZZ, 98%, 1% and 1%, respectively,  until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LTM4 has been reduced to zero; eleventh,  to
the Uncertificated  Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1
Regular  Interest  LTM3 and  REMIC 1  Regular  Interest  LTZZ,  98%,  1% and 1%,
respectively,  until the  Uncertificated  Principal  Balance  of REMIC 1 Regular
Interest LTM3 has been reduced to zero; twelfth, to the Uncertificated Principal
Balances of REMIC 1 Regular  Interest  LTAA,  REMIC 1 Regular  Interest LTM2 and
REMIC  1  Regular  Interest  LTZZ,  98%,  1% and  1%,  respectively,  until  the
Uncertificated  Principal  Balance  of REMIC 1  Regular  Interest  LTM2 has been
reduced to zero; and thirteenth,  to the  Uncertificated  Principal  Balances of
REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest LTM1 and REMIC 1 Regular
Interest LTZZ, 98%, 1% and 1%, respectively,  until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LTM1 has been reduced to zero.




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                                    ARTICLE V

                                THE CERTIFICATES

      SECTION 5.01. The Certificates.

      Each of the Floating  Rate  Certificates,  the Class P  Certificates,  the
Class C Certificates and the Residual Certificates shall be substantially in the
forms annexed hereto as exhibits,  and shall,  on original  issue,  be executed,
authenticated and delivered by the Trustee to or upon the order of the Depositor
concurrently  with the sale and assignment to the Trustee of the Trust Fund. The
Floating  Rate  Certificates  shall  be  initially  evidenced  by  one  or  more
Certificates   representing   a  Percentage   Interest  with  a  minimum  dollar
denomination  of  $25,000  and  integral  dollar  multiples  of $1.00 in  excess
thereof,  except that one Certificate of each such Class of Certificates  may be
in a  different  denomination  so  that  the  sum  of the  denominations  of all
outstanding  Certificates  of such Class shall equal the  Certificate  Principal
Balance of such Class on the Closing Date. The Class P Certificates, the Class C
Certificates  and the  Residual  Certificates  are  issuable  in any  Percentage
Interests; provided, however, that the sum of all such percentages for each such
Class totals 100% and no more than ten  Certificates of each Class may be issued
and outstanding at any one time.

      The  Certificates  shall be  executed  on behalf of the Trust by manual or
facsimile  signature  on  behalf  of  the  Trustee  by  a  Responsible  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 Trust,  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
Certificate.  No  Certificate  shall  be  entitled  to any  benefit  under  this
Agreement or be valid for any purpose,  unless such Certificate  shall have been
manually  authenticated  by the Trustee  substantially  in the form provided for
herein,  and such  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.  Subject to Section 5.02(c),  the Class A Certificates
and the  Mezzanine  Certificates  shall be  Book-Entry  Certificates.  The other
Classes of Certificates shall be Definitive Certificates.

      SECTION 5.02. Registration of Transfer and Exchange of Certificates.

      (a) The  Certificate  Registrar  shall  cause to be kept at the  Corporate
Trust  Office a  Certificate  Register  in  which,  subject  to such  reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of  Certificates  and of transfers and exchanges of Certificates as
herein provided.  The Trustee shall initially serve as Certificate Registrar for
the  purpose  of  registering   Certificates  and  transfers  and  exchanges  of
Certificates as herein provided.

      Upon  surrender for  registration  of transfer of any  Certificate  at any
office  or agency  of the  Certificate  Registrar  maintained  for such  purpose
pursuant to the foregoing paragraph and, in the case of a Residual  Certificate,
upon satisfaction of the conditions set forth below, the Trustee on


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<PAGE>

behalf of the Trust shall execute,  authenticate and deliver, in the name of the
designated  transferee or transferees,  one or more new Certificates of the same
aggregate Percentage Interest.

      At the option of the Certificateholders, Certificates may be exchanged for
other Certificates in authorized denominations and the same aggregate Percentage
Interests, upon surrender of the Certificates to be exchanged at any such office
or agency.  Whenever any  Certificates  are so  surrendered  for  exchange,  the
Trustee  shall execute on behalf of the Trust and  authenticate  and deliver the
Certificates  which the  Certificateholder  making the  exchange  is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Trustee or the  Certificate  Registrar)
be duly  endorsed  by, or be  accompanied  by a written  instrument  of transfer
satisfactory to the Trustee and the Certificate  Registrar duly executed by, the
Holder thereof or his attorney duly authorized in writing. In addition, (i) with
respect to each Class R  Certificate,  the holder  thereof may exchange,  in the
manner described above, such Class R Certificate for two separate  certificates,
each representing such holder's respective  Percentage Interest in the Class R-1
Interest  and the Class  R-2  Interest  (in the form of  Exhibit  A-19  hereto),
respectively,  in each case that was evidenced by the Class R Certificate  being
exchanged  and (ii) with  respect  to each  Class R-X  Certificate,  the  holder
thereof may exchange,  in the manner described above, such Class R-X Certificate
for two  separate  certificates,  each  representing  such  holder's  respective
Percentage Interest in the Class R-3 Interest and the Class R-4 Interest (in the
form of Exhibit A-19 hereto),  respectively,  in each case that was evidenced by
the Class R-X Certificate being exchanged.

      (b) Except as provided in paragraph (c) below, the Book-Entry Certificates
shall  at all  times  remain  registered  in the name of the  Depository  or its
nominee  and at all times:  (i)  registration  of such  Certificates  may not be
transferred  by the Trustee  except to another  Depository;  (ii) the Depository
shall maintain  book-entry  records with respect to the  Certificate  Owners and
with respect to ownership and transfers of such  Certificates;  (iii)  ownership
and  transfers  of  registration  of  such  Certificates  on  the  books  of the
Depository shall be governed by applicable rules  established by the Depository;
(iv) the  Depository  may  collect  its usual and  customary  fees,  charges and
expenses  from  its  Depository  Participants;  (v) the  Trustee  shall  for all
purposes deal with the Depository as representative of the Certificate Owners of
the  Certificates  for purposes of  exercising  the rights of Holders under this
Agreement,  and requests  and  directions  for and votes of such  representative
shall  not be  deemed  to be  inconsistent  if they are  made  with  respect  to
different  Certificate  Owners;  (vi) the  Trustee  may rely and  shall be fully
protected in relying upon  information  furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect  participating  firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the  direct  participants  of the  Depository  shall  have no rights  under this
Agreement under or with respect to any of the Certificates  held on their behalf
by the  Depository,  and the  Depository  may be treated by the  Trustee and its
agents,  employees,  officers  and  directors  as  the  absolute  owner  of  the
Certificates for all purposes whatsoever.

      All transfers by Certificate  Owners of Book-Entry  Certificates  shall be
made in accordance with the procedures established by the Depository Participant
or  brokerage  firm  representing  such  Certificate   Owners.  Each  Depository
Participant shall only transfer  Book-Entry  Certificates of Certificate  Owners
that it represents or of brokerage firms for which it acts as agent


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<PAGE>

in accordance with the Depository's  normal  procedures.  The parties hereto are
hereby authorized to execute a Letter of Representations  with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository.

      (c) If (i)(x) the  Depository  or the  Depositor  advises  the  Trustee in
writing that the Depository is no longer  willing or able to discharge  properly
its  responsibilities  as  Depository  and (y) the Trustee or the  Depositor  is
unable to locate a qualified successor,  (ii) the Depositor, at its sole option,
with the consent of the  Trustee,  elects to  terminate  the  book-entry  system
through the  Depository  or (iii) after the  occurrence  of a Servicer  Event of
Termination,  the Certificate Owners of the Book-Entry Certificates representing
Percentage  Interests of such Classes  aggregating  not less than 51% advise the
Trustee and Depository  through the financial  intermediaries and the Depository
Participants in writing that the continuation of a book-entry system through the
Depository to the exclusion of issuing definitive, fully registered certificates
(the "Definitive  Certificates") to Certificate  Owners is no longer in the best
interests of the  Certificate  Owners,  then upon  surrender to the  Certificate
Registrar of the  Book-Entry  Certificates  by the  Depository,  accompanied  by
registration  instructions  from the  Depository for  registration,  the Trustee
shall,  at the  Depositor's  expense,  in the case of (i) or (ii) above,  or the
Servicer's expense,  in the case of (iii) above,  execute on behalf of the Trust
and  authenticate  the  Definitive  Certificates.  Neither the Depositor nor the
Trustee  shall  be  liable  for any  delay  in  delivery  of  such  registration
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions.  Upon the issuance of Definitive  Certificates,  the Trustee,
the  Certificate  Registrar,  the  Servicer,  any Paying Agent and the Depositor
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.

      (d) No  transfer,  sale,  pledge  or  other  disposition  of any  Class  B
Certificate,  Class C Certificate,  Class P Certificate or Residual  Certificate
shall  be  made  unless  such   disposition  is  exempt  from  the  registration
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and any
applicable  state securities laws or is made in accordance with the 1933 Act and
such laws. In the event of any such transfer, except with respect to the initial
transfer of any Class B Certificate, Class C Certificate, Class P Certificate or
Residual  Certificates  by the  Depositor  (i) unless  such  transfer is made in
reliance upon Rule 144A (as evidenced by an investment  letter  delivered to the
Trustee,  in substantially the form attached hereto as Exhibit J) under the 1933
Act, the Trustee and the Depositor  shall  require a written  Opinion of Counsel
(which  may  be  in-house  counsel)  acceptable  to and in  form  and  substance
reasonably satisfactory to the Trustee and the Depositor, that such transfer may
be made pursuant to an exemption,  describing the  applicable  exemption and the
basis  therefor,  from the 1933 Act or is being made  pursuant  to the 1933 Act,
which Opinion of Counsel shall not be an expense of the Trustee or the Depositor
or (ii) the  Trustee  shall  require  the  transferor  to  execute a  transferor
certificate  (in  substantially  the form attached  hereto as Exhibit L) and the
transferee to execute an investment  letter (in  substantially the form attached
hereto  as  Exhibit  J)  acceptable  to and in  form  and  substance  reasonably
satisfactory  to the Depositor  and the Trustee  certifying to the Depositor and
the Trustee the facts  surrounding such transfer,  which investment letter shall
not be an  expense  of the  Trustee  or the  Depositor.  The Holder of a Class B
Certificate,  Class C Certificate,  Class P Certificate or Residual  Certificate
desiring to effect such transfer shall,  and does hereby agree to, indemnify the
Trustee and the Depositor  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.
Notwithstanding  anything  to the  contrary  contained  in this  Agreement,  all
transfers of the Class B Certificates shall be made in reliance upon Rule 144A.


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<PAGE>

      Notwithstanding  the  foregoing,  no  certification  or Opinion of Counsel
described  in this  Section  5.02(d)  will be  required in  connection  with the
transfer, on the Closing Date, of any Class R Certificate by the Depositor to an
"accredited investor" within the meaning of Rule 501 of the 1933 Act.

      No  transfer  of a  Class B  Certificate,  Class  C  Certificate,  Class P
Certificate or Residual Certificate or any interest therein shall be made to any
Plan subject to ERISA or Section 4975 of the Code, any Person  acting,  directly
or  indirectly,  on  behalf  of any  such  Plan  or any  Person  acquiring  such
Certificates  with "Plan  Assets" of a Plan within the meaning of  Department of
Labor regulations  promulgated at 29 C.F.R. ss.  2510.3-101 ("Plan Assets"),  as
certified by such transferee in the form of Exhibit M, unless (i) in the case of
a Class C  Certificate,  a Class P  Certificate  or  Residual  Certificate,  the
Depositor,  the Trustee and the Servicer are provided with an Opinion of Counsel
which  establishes to the  satisfaction  of the  Depositor,  the Trustee and the
Servicer that the purchase of such  Certificates is permissible under applicable
law, will not constitute or result in any prohibited  transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor,  the Servicer,  the
Trustee or the Trust Fund to any obligation or liability (including  obligations
or  liabilities  under  ERISA or Section  4975 of the Code) in addition to those
undertaken in this  Agreement,  which Opinion of Counsel shall not be an expense
of the  Depositor,  the  Servicer,  the Trustee or the Trust Fund or (ii) in the
case of a Class B Certificate, (1) it is an insurance company, (2) the source of
funds  used to  acquire  or hold  the  certificate  or  interest  therein  is an
"insurance  company  general  account,"  as such term is defined  in  Prohibited
Transaction Class Exemption  ("PTCE") 95-60 and (3) the conditions in Sections I
and III of PTCE  95-60  have  been  satisfied.  Neither a  certification  nor an
Opinion of Counsel will be required in connection  with the initial  transfer of
any such Certificate by the Depositor to an Affiliate of the Depositor (in which
case, the Depositor or any Affiliate thereof shall be deemed to have represented
that such  Affiliate  is not a Plan or a Person  investing  Plan Assets) and the
Trustee  shall be entitled to  conclusively  rely upon a  representation  (which
shall be a written  representation)  from the  Depositor  of the  status of such
transferee as an affiliate of the Depositor.

      Each  Transferee  of a  Mezzanine  Certificate  will  be  deemed  to  have
represented  by  virtue of its  purchase  or  holding  of such  Certificate  (or
interest  therein)  that either (a) such  Transferee is not a Plan or purchasing
such  Certificate  with Plan  Assets,  (b) it has  acquired  and is holding such
Certificate in reliance on Prohibited  Transaction  Exemption  ("PTE") 90-59, 55
Fed. Reg.  36724  (September 6, 1990),  as amended by PTE 2000-58,  65 Fed. Reg.
67765 (November 13, 2000) and PTE 2002-41,  67 Fed. Reg. 54487 (August 22, 2002)
(the "Exemption"),  and that it understands that there are certain conditions to
the availability of the Exemption including that such Certificate must be rated,
at the time of purchase,  not lower than "BBB-" (or its  equivalent) by a Rating
Agency, or (c) the following conditions are satisfied: (i) such Transferee is an
insurance  company,  (ii) the  source  of funds  used to  purchase  or hold such
Certificate (or interest therein) is an "insurance  company general account" (as
defined in PTCE 95-60), and (iii) the conditions set forth in Sections I and III
of PTCE 95-60 have been satisfied.

      If any Mezzanine  Certificate,  Class B Certificate,  Class C Certificate,
Class P Certificate or Residual  Certificate or any interest therein is acquired
or held in violation of the  provisions  of the preceding  paragraphs,  the next
preceding permitted  beneficial owner will be treated as the beneficial owner of
that Certificate retroactive to the date of transfer to the purported


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<PAGE>

beneficial owner. Any purported beneficial owner whose acquisition or holding of
any such  Certificate  or interest  therein was  effected  in  violation  of the
provisions  of the  preceding  paragraph  shall  indemnify and hold harmless the
Depositor,  the Servicer, the Trustee and the Trust from and against any and all
liabilities,  claims, costs or expenses incurred by those parties as a result of
that acquisition or holding.

      Each Person who has or who acquires any  Ownership  Interest in a Residual
Certificate  shall be deemed by the  acceptance or acquisition of such Ownership
Interest  to have  agreed to be bound by the  following  provisions  and to have
irrevocably  appointed the Depositor or its designee as its attorney- in-fact to
negotiate the terms of any mandatory  sale under clause (v) below and to execute
all  instruments of transfer and to do all other things  necessary in connection
with any such  sale,  and the  rights of each  Person  acquiring  any  Ownership
Interest  in a Residual  Certificate  are  expressly  subject  to the  following
provisions:

            (i) Each Person  holding or acquiring  any  Ownership  Interest in a
      Residual  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 Person  shall  acquire an  Ownership  Interest in a Residual
      Certificate  unless  such  Ownership  Interest  is a  PRO  RATA  undivided
      interest.

            (iii) In  connection  with any  proposed  transfer of any  Ownership
      Interest in a Residual  Certificate,  the Trustee  shall as a condition to
      registration  of the  transfer,  require  delivery  to  it,  in  form  and
      substance satisfactory to it, of each of the following:

            (A)   an affidavit in the form of Exhibit K hereto from the proposed
                  transferee  to the effect that such  transferee is a Permitted
                  Transferee and that it is not acquiring its Ownership Interest
                  in  the  Residual  Certificate  that  is  the  subject  of the
                  proposed  transfer  as a  nominee,  trustee  or agent  for any
                  Person who is not a Permitted Transferee; and

            (B)   a covenant of the proposed  transferee  to the effect that the
                  proposed  transferee agrees to be bound by and to abide by the
                  transfer restrictions applicable to the Residual Certificates.

            (iv) Any attempted or purported  transfer of any Ownership  Interest
      in a Residual  Certificate  in violation of the provisions of this Section
      shall  be  absolutely  null  and  void and  shall  vest no  rights  in the
      purported  transferee.  If any purported transferee shall, in violation of
      the provisions of this Section, become a Holder of a Residual Certificate,
      then the prior  Holder of such  Residual  Certificate  that is a Permitted
      Transferee shall, upon discovery that the registration of transfer of such
      Residual  Certificate  was  not in fact  permitted  by  this  Section,  be
      restored  to all  rights  as  Holder  thereof  retroactive  to the date of
      registration of transfer of such Residual  Certificate.  The Trustee shall
      be under no liability to any Person for any  registration of transfer of a
      Residual  Certificate that is in fact not permitted by this Section or for
      making any  distributions  due on such Residual  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 received the documents
      specified in


                                      114
<PAGE>

      clause (iii).  The Trustee shall be entitled to recover from any Holder of
      a Residual  Certificate that was in fact not a Permitted Transferee at the
      time such  distributions were made all distributions made on such Residual
      Certificate.  Any such  distributions so recovered by the Trustee shall be
      distributed  and  delivered  by the  Trustee  to the prior  Holder of such
      Residual Certificate that is a Permitted Transferee.

            (v) If any Person  other than a Permitted  Transferee  acquires  any
      Ownership  Interest  in  a  Residual   Certificate  in  violation  of  the
      restrictions  in this  Section,  then the Trustee shall have the right but
      not  the  obligation,  without  notice  to the  Holder  of  such  Residual
      Certificate or any other Person having an Ownership  Interest therein,  to
      notify the Depositor to arrange for the sale of such Residual Certificate.
      The  proceeds  of  such  sale,  net  of  commissions  (which  may  include
      commissions  payable to the Depositor or its affiliates in connection with
      such  sale),  expenses  and taxes due,  if any,  will be  remitted  by the
      Trustee to the  previous  Holder of such  Residual  Certificate  that is a
      Permitted Transferee, except that in the event that the Trustee determines
      that the Holder of such Residual  Certificate may be liable for any amount
      due under this  Section or any other  provisions  of this  Agreement,  the
      Trustee  may  withhold a  corresponding  amount  from such  remittance  as
      security for such claim.  The terms and  conditions of any sale under this
      clause (v) shall be determined  in the sole  discretion of the Trustee and
      it shall not be liable to any Person  having an  Ownership  Interest  in a
      Residual Certificate as a result of its exercise of such discretion.

            (vi) If any Person  other than a Permitted  Transferee  acquires any
      Ownership  Interest  in  a  Residual   Certificate  in  violation  of  the
      restrictions in this Section,  then the Trustee upon receipt of reasonable
      compensation  will provide to the  Internal  Revenue  Service,  and to the
      persons specified in Sections 860E(e)(3) and (6) of the Code,  information
      needed to compute the tax imposed under Section  860E(e)(5) of the Code on
      transfers of residual interests to disqualified organizations.

      The foregoing provisions of this Section shall cease to apply to transfers
occurring  on or after the date on which there shall have been  delivered to the
Trustee,  in  form  and  substance  satisfactory  to the  Trustee,  (i)  written
notification  from each Rating  Agency that the removal of the  restrictions  on
transfer  set  forth in this  Section  will not  cause  such  Rating  Agency  to
downgrade its rating of the  Certificates  and (ii) an Opinion of Counsel to the
effect that such removal will not cause any REMIC  created  hereunder to fail to
qualify as a REMIC.

      (e) No service  charge shall be made for any  registration  of transfer or
exchange of Certificates of any Class, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental  charge that may be
imposed in connection with any transfer or exchange of Certificates.

      All  Certificates  surrendered  for  registration  of transfer or exchange
shall be canceled by the  Certificate  Registrar and disposed of pursuant to its
standard procedures.

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

      If (i)  any  mutilated  Certificate  is  surrendered  to  the  Certificate
Registrar or the Certificate  Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such


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security or indemnity as may be required by them to save each of them  harmless,
then, in the absence of notice to the Trustee or the Certificate  Registrar that
such  Certificate has been acquired by a bona fide purchaser,  the Trustee shall
execute on behalf of the Trust,  authenticate and deliver, in exchange for or in
lieu of any  such  mutilated,  destroyed,  lost  or  stolen  Certificate,  a new
Certificate of like tenor and Percentage Interest.  Upon the issuance of any new
Certificate  under this Section,  the Trustee or the  Certificate  Registrar 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  and  the  Certificate  Registrar)  in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute  complete and indefeasible  evidence of ownership in the Trust,
as  if  originally  issued,  whether  or  not  the  lost,  stolen  or  destroyed
Certificate shall be found at any time.

      SECTION 5.04. Persons Deemed Owners.

      The Servicer, the Depositor,  the Trustee, the Certificate Registrar,  any
Paying Agent and any agent of the  Servicer,  the  Depositor,  the Trustee,  the
Certificate  Registrar  or any Paying  Agent may treat the  Person,  including a
Depository,  in whose name any  Certificate  is  registered as the owner of such
Certificate for the purpose of receiving  distributions pursuant to Section 4.01
and for all other purposes whatsoever,  and none of the Servicer, the Trust, the
Trustee  nor any  agent  of any of them  shall  be  affected  by  notice  to the
contrary.

      SECTION 5.05. Appointment of Paying Agent.

      (a) The Paying Agent shall make distributions to  Certificateholders  from
the  Distribution  Account pursuant to Section 4.01 and shall report the amounts
of such distributions to the Trustee. The duties of the Paying Agent may include
the obligation (i) to withdraw  funds from the  Collection  Account  pursuant to
Section  3.11(a)  and for the  purpose of making the  distributions  referred to
above  and  (ii)  to   distribute   statements   and  provide   information   to
Certificateholders  as required  hereunder.  The Paying Agent hereunder shall at
all times be an entity duly organized and validly existing under the laws of the
United  States of America or any state  thereof,  authorized  under such laws to
exercise  corporate  trust powers and subject to  supervision  or examination by
federal or state  authorities.  The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying  Agent,  which  appointment
shall be reasonably satisfactory to the Depositor.

      (b) The Trustee  shall cause the Paying  Agent (if other than the Trustee)
to execute and deliver to the Trustee an  instrument  in which such Paying Agent
shall agree with the Trustee that such Paying Agent shall hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders  entitled  thereto  until  such  sums  shall  be paid to such
Certificateholders and shall agree that it shall comply with all requirements of
the Code  regarding  the  withholding  of payments in respect of Federal  income
taxes due from  Certificate  Owners and otherwise  comply with the provisions of
this Agreement applicable to it.


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                                   ARTICLE VI

                         THE SERVICER AND THE DEPOSITOR

      SECTION 6.01. Liability of the Servicer and the Depositor.

      The Servicer shall be liable in accordance  herewith only to the extent of
the obligations specifically imposed upon and undertaken by Servicer herein. The
Depositor  shall be  liable in  accordance  herewith  only to the  extent of the
obligations specifically imposed upon and undertaken by the Depositor.

      SECTION 6.02. Merger or Consolidation of, or Assumption of the Obligations
                    of, the Servicer or the Depositor.

      Any  entity  into  which  the  Servicer  or  Depositor  may be  merged  or
consolidated,   or  any  entity   resulting  from  any  merger,   conversion  or
consolidation  to which the Servicer or the Depositor  shall be a party,  or any
corporation  succeeding to the business of the Servicer or the Depositor,  shall
be the  successor  of the  Servicer  or the  Depositor,  as  the  case  may  be,
hereunder,  without the  execution  or filing of any paper or any further act on
the  part  of  any  of the  parties  hereto,  anything  herein  to the  contrary
notwithstanding;  provided,  however,  that the successor Servicer shall satisfy
all the  requirements  of Section 7.02 with respect to the  qualifications  of a
successor Servicer.

      SECTION 6.03. Limitation on Liability of the Servicer and Others.

      Neither  the  Servicer  nor  the  Depositor  nor any of the  directors  or
officers or employees or agents of the Servicer or the Depositor  shall be under
any liability to the Trust or the Certificateholders for any action taken or for
refraining  from the taking of any action by the  Servicer or the  Depositor  in
good faith  pursuant to this  Agreement,  or for errors in  judgment;  provided,
however,  that this provision  shall not protect the Servicer,  the Depositor or
any such Person against any liability which would otherwise be imposed by reason
of its willful misfeasance, bad faith or negligence in the performance of duties
of the  Servicer  or the  Depositor,  as the case may be,  or by  reason  of its
reckless  disregard of its obligations  and duties as Servicer or Depositor,  as
the case may be, hereunder. The Servicer and any director or officer or employee
or agent of the  Servicer  may rely in good  faith on any  document  of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder.  The Servicer and the Depositor,  and any director or officer
or employee or agent of the Servicer or the  Depositor,  shall be indemnified by
the Trust and held harmless  against any loss,  liability or expense incurred in
connection  with  (i)  any  legal  action  relating  to  this  Agreement  or the
Certificates,  other than any loss,  liability or expense  incurred by reason of
its willful  misfeasance,  bad faith or  negligence or by reason of its reckless
disregard of its obligations and duties hereunder or by reason of its failure to
perform  its  obligations  or  duties   hereunder  and  (ii)  any  breach  of  a
representation  or warranty  regarding the Mortgage  Loans.  The Servicer or the
Depositor may undertake any such action which it may deem necessary or desirable
in respect of this  Agreement,  and the rights and duties of the parties  hereto
and the interests of the Certificateholders hereunder. In such event, unless the
Depositor  or  the  Servicer   acts  without  the  consent  of  the  Holders  of
Certificates entitled to at least 51% of the Voting Rights, the reasonable legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs


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<PAGE>

and liabilities of the Trust and the Servicer shall be entitled to be reimbursed
therefor from the  Collection  Account as and to the extent  provided in Section
3.11,  any  such  right  of  reimbursement  being  prior  to the  rights  of the
Certificateholders  to  receive  any  amount  in  the  Collection  Account.  The
Servicer's  right to indemnity or  reimbursement  pursuant to this Section shall
survive any resignation or termination of the Servicer  pursuant to Section 6.04
or 7.01 with respect to any losses, expenses, costs or liabilities arising prior
to such  resignation or termination  (or arising from events that occurred prior
to such resignation or termination).  This paragraph shall apply to the Servicer
solely in its capacity as Servicer hereunder and in no other capacities.

      SECTION 6.04. Servicer Not to Resign.

      The  Servicer  shall not resign  from the  obligations  and duties  hereby
imposed on it except upon  determination that its duties hereunder are no longer
permissible  under  applicable  law.  Any  such  determination  pursuant  to the
preceding sentence permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect  obtained at the expense of the Servicer
and  delivered  to the Trustee.  No  resignation  of the  Servicer  shall become
effective  until the  Trustee or a  successor  servicer  shall have  assumed the
Servicer's  responsibilities,  duties, liabilities (other than those liabilities
arising  prior to the  assumption  of  servicing  duties by the  Trustee  or the
appointment of such  successor) and obligations  under this Agreement.  Any such
resignation  shall not relieve the  Servicer  of  responsibility  for any of the
obligations  specified in Sections 7.01 and 7.02 as obligations that survive the
resignation or receipt of notice of termination of the Servicer

      Except as expressly  provided in this  Agreement,  the Servicer  shall not
assign or transfer any of its rights,  benefits or  privileges  hereunder to any
other Person,  or delegate to or  subcontract  with, or authorize or appoint any
other  Person to perform  any of the  duties,  covenants  or  obligations  to be
performed by the Servicer  hereunder.  The foregoing  prohibition  on assignment
shall not prohibit the Servicer from  designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder;  provided, however, no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties hereto
shall not be required to recognize any  Subservicer as an indemnitee  under this
Agreement.

      SECTION 6.05. Delegation of Duties.

      In the ordinary course of business,  the Servicer at any time may delegate
any of its duties hereunder to any Person, including any of its Affiliates,  who
agrees to conduct such duties in accordance  with standards  comparable to those
set forth in Section 3.01. Such delegation shall not relieve the Servicer of its
liabilities  and  responsibilities  with  respect  to such  duties and shall not
constitute a resignation  within the meaning of Section 6.04. Except as provided
in Section  3.02, no such  delegation  is permitted  that results in the delegee
subservicing  any Mortgage Loans. The Servicer shall provide the Trustee with 60
days prior  written  notice prior to the  delegation of any of its duties to any
Person  other  than  any  of  the  Servicer's  Affiliates  or  their  respective
successors and assigns.

      SECTION 6.06. [Reserved].


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<PAGE>


      SECTION 6.07. Inspection.

      The Servicer, in its capacity as Servicer,  shall afford the Trustee, upon
reasonable  notice,   during  normal  business  hours,  access  to  all  records
maintained  by the Servicer in respect of its rights and  obligations  hereunder
and access to officers of the Servicer responsible for such obligations.





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<PAGE>


                                   ARTICLE VII

                                     DEFAULT

      SECTION 7.01. Servicer Events of Termination.

      (a) If any one of the following events  ("Servicer Events of Termination")
shall occur and be continuing:

            (i) (A) The failure by the Servicer to make any Advance;  or (B) any
      other failure by the Servicer to deposit in the Collection  Account or the
      Distribution  Account any  deposit  required to be made under the terms of
      this Agreement which continues unremedied for a period of one Business Day
      after the date upon which  written  notice of such failure shall have been
      given to the Servicer by the Trustee or to the Servicer and the Trustee by
      any Holders of a Regular Certificate evidencing at least 25% of the Voting
      Rights; or

            (ii) The  failure by the  Servicer  to make any  required  Servicing
      Advance which failure continues unremedied for a period of 30 days, or the
      failure  by the  Servicer  duly to  observe or  perform,  in any  material
      respect, any other covenants, obligations or agreements of the Servicer as
      set forth in this  Agreement,  which failure  continues  unremedied  for a
      period of 30 days (or if such failure or breach cannot be remedied  within
      30 days,  then such remedy  shall have been  commenced  within 30 days and
      diligently pursued thereafter;  provided,  however, that in no event shall
      such failure or breach be allowed to exist for a period of greater than 90
      days),  after  the date  (A) on  which  written  notice  of such  failure,
      requiring  the same to be remedied,  shall have been given to the Servicer
      by the Trustee or to the  Trustee by any Holders of a Regular  Certificate
      evidencing at least 25% of the Voting Rights or (B) of actual knowledge of
      such failure by a Servicing Officer of the Servicer; or

            (iii) The entry against the Servicer of a decree or order by a court
      or agency or supervisory authority having jurisdiction in the premises for
      the appointment of a trustee,  conservator,  receiver or liquidator in any
      insolvency,   conservatorship,   receivership,   readjustment   of   debt,
      marshalling of assets and liabilities or similar  proceedings,  or for the
      winding up or liquidation of its affairs,  and the continuance of any such
      decree or order unstayed and in effect for a period of 60 days; or

            (iv) The Servicer shall voluntarily go into liquidation,  consent to
      the  appointment  of a  conservator  or receiver or  liquidator or similar
      person in any insolvency,  readjustment of debt, marshalling of assets and
      liabilities or similar proceedings of or relating to the Servicer or of or
      relating to all or substantially all of its property; or a decree or order
      of a court or agency or supervisory  authority having  jurisdiction in the
      premises for the  appointment  of a conservator,  receiver,  liquidator or
      similar person 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 Servicer
      and such  decree  or order  shall  have  remained  in force  undischarged,
      unbonded or unstayed for a period of 60 days; or the Servicer  shall admit
      in writing its  inability  to pay its debts  generally as they become due,
      file a  petition  to  take  advantage  of  any  applicable  insolvency  or
      reorganization


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<PAGE>

      statute,   make  an  assignment  for  the  benefit  of  its  creditors  or
      voluntarily suspend payment of its obligations; or

            (v) Centex Corporation or its successors shall fail to own, directly
      or indirectly,  at least 51% of the Servicer  unless the Servicer shall be
      rated at least  investment  grade by each of Standard & Poor's and Moody's
      and, if rated by Fitch Ratings, by Fitch Ratings.

      (b) then,  and in each and every such case, so long as a Servicer Event of
Termination shall not have been remedied within the applicable grace period, (x)
with respect solely to clause (i)(A) above, if such Advance is not made by 11:00
A.M.,  New York time,  on the Business Day  immediately  following  the Servicer
Remittance Date (provided the Trustee shall give the Servicer,  and the Servicer
shall have  received,  notice of such  failure to advance by 5:00 P.M.  New York
time on the Servicer  Remittance  Date),  the Trustee shall terminate all of the
rights and obligations of the Servicer under this Agreement and the Trustee,  or
a  successor   servicer   appointed  in  accordance  with  Section  7.02,  shall
immediately  make such Advance and assume,  pursuant to Section 7.02, the duties
of a successor Servicer and (y) in the case of (i)(B), (ii), (iii), (iv) and (v)
above,  the  Trustee  shall,  at the  direction  of the Holders of each Class of
Regular Certificates  evidencing  Percentage Interests aggregating not less than
51%,  by notice  then given in writing to the  Servicer  (and to the  Trustee if
given by Holders of  Certificates),  terminate all of the rights and obligations
of the  Servicer  as  servicer  under  this  Agreement.  Any such  notice to the
Servicer  shall  also be given to each  Rating  Agency,  the  Depositor  and the
Servicer.  On or after the receipt by the  Servicer  (and by the Trustee if such
notice is given by the Holders) of such written notice,  all authority and power
of the Servicer under this Agreement,  whether with respect to the  Certificates
or the Mortgage  Loans or otherwise,  shall pass to and be vested in the Trustee
pursuant to and under this Section; and, without limitation,  and the Trustee is
hereby  authorized  and  empowered  to  execute  and  deliver,  on behalf of the
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  of each  Mortgage  Loan  and  related
documents or otherwise.  The Servicer  agrees to cooperate  with the Trustee (or
the  applicable   successor  Servicer)  in  effecting  the  termination  of  the
responsibilities  and  rights  of the  Servicer  hereunder,  including,  without
limitation,  the delivery to the Trustee of all documents and records  requested
by it to enable it to assume  the  Servicer's  functions  under  this  Agreement
within ten Business  Days  subsequent  to such notice,  the transfer  within one
Business  Day  subsequent  to such  notice  to the  Trustee  (or the  applicable
successor  Servicer) for the administration by it of all cash amounts that shall
at the time be held by the Servicer and to be deposited by it in the  Collection
Account, the Distribution Account, any REO Account or any Escrow Account or that
have been  deposited by the Servicer in such accounts or thereafter  received by
the Servicer with respect to the Mortgage Loans or any REO Property  received by
the Servicer.  All reasonable  costs and expenses  (including  attorneys'  fees)
incurred in connection  with  transferring  the Mortgage  Files to the successor
Servicer and amending  this  Agreement  to reflect such  succession  as Servicer
pursuant to this Section  shall be paid by the  predecessor  Servicer (or if the
predecessor  Servicer is the Trustee, the initial Servicer) upon presentation of
reasonable  documentation  of such costs and expenses and to the extent not paid
by the Servicer, by the Trust.


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<PAGE>


      Notwithstanding  the termination of the Servicer  hereunder,  the Servicer
shall  be  entitled  to  reimbursement  of all  unpaid  Servicing  Fees  and all
unreimbursed  Advances and Servicing Advances in the manner and at the times set
forth herein.

      SECTION 7.02. Trustee to Act; Appointment of Successor.

      (a) From the time the Servicer (and the Trustee,  if notice is sent by the
Holders) receives a notice of termination  pursuant to Section 7.01 or 6.04, the
Trustee (or such other successor Servicer as is approved in accordance with this
Agreement)  shall  be the  successor  in all  respects  to the  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 Servicer by the terms and provisions
hereof arising on and after its succession.  Notwithstanding the foregoing,  the
parties  hereto agree that the Trustee,  in its capacity as successor  Servicer,
immediately will assume all of the obligations of the Servicer to make advances.
Notwithstanding  the  foregoing,  the  Trustee,  in its  capacity  as  successor
Servicer,  shall not be responsible for the lack of information and/or documents
that it cannot obtain through reasonable efforts. It is understood and agreed by
the parties  hereto that there will be a period of transition  (not to exceed 90
days) before the  transition of servicing  obligations  is fully  effective.  As
compensation  therefor,  the Trustee (or such other successor Servicer) shall be
entitled  to such  compensation  as the  Servicer  would have been  entitled  to
hereunder if no such notice of termination had been given.  Notwithstanding  the
above,  (i) if the Trustee is unwilling to act as successor  Servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent  jurisdiction to appoint,  any  established  housing and home
finance  institution,  bank or other  mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the  responsibilities,  duties
or liabilities of the Servicer hereunder;  provided, that the appointment of any
such  successor  Servicer  will not result in the  qualification,  reduction  or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced  by a  letter  to  such  effect  from  the  Rating  Agencies.  Pending
appointment  of a successor  to the  Servicer  hereunder,  unless the Trustee is
prohibited  by law from so acting,  the  Trustee  shall act in such  capacity as
hereinabove  provided.  In connection with such appointment and assumption,  the
successor shall be entitled to receive  compensation out of payments on Mortgage
Loans in an amount equal to the compensation  which the Servicer would otherwise
have  received  pursuant  to  Section  3.18 (or such other  compensation  as the
Trustee and such successor  shall agree,  not to exceed the Servicing  Fee). The
appointment  of a  successor  Servicer  shall not  affect any  liability  of the
predecessor  Servicer  which may have arisen under this  Agreement  prior to its
termination as Servicer to pay any deductible under an insurance policy pursuant
to Section 3.14 or to reimburse the Trustee pursuant to Section 3.06), nor shall
any  successor  Servicer be liable for any acts or omissions of the  predecessor
Servicer  or for any breach by such  Servicer of any of its  representations  or
warranties contained herein or in any related document or agreement. The Trustee
and such successor shall take such action,  consistent  with this Agreement,  as
shall be necessary to effectuate any such succession.  All reasonable  Servicing
Transfer Costs shall be paid by the  predecessor  Servicer upon  presentation of
reasonable  documentation  of  such  costs,  and if  such  predecessor  Servicer
defaults in its  obligation  to pay such costs,  such costs shall be paid by the
successor  Servicer or the Trustee (in which case the successor  Servicer or the
Trustee,  as applicable,  shall be entitled to  reimbursement  therefor from the
assets of the Trust).


                                      122
<PAGE>


      (b) Any successor to the Servicer, including the Trustee, shall during the
term of its service as servicer  continue to service and administer the Mortgage
Loans for the benefit of  Certificateholders,  and maintain in force a policy or
policies of insurance  covering  errors and omissions in the  performance of its
obligations  as  Servicer  hereunder  and a  fidelity  bond  in  respect  of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.14.

      SECTION 7.03. Waiver of Defaults.

      The Majority  Certificateholders may, on behalf of all Certificateholders,
waive,  in writing,  any events  permitting  removal of the Servicer as servicer
pursuant  to  this   Article   VII,   provided,   however,   that  the  Majority
Certificateholders  may not waive a default in making a required distribution on
a  Certificate  without the written  consent of the Holder of such  Certificate.
Upon any waiver of a past  default,  such  default  shall cease to exist and any
Servicer Event of  Termination  arising  therefrom  shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent  expressly  so waived.  Notice of any such  waiver  shall be given by the
Trustee to the Rating Agencies.

      SECTION 7.04. Notification to Certificateholders.

      (a) Upon any  termination  or  appointment  of a successor to the Servicer
pursuant to this  Article  VII or Section  6.04,  the Trustee  shall give prompt
written notice thereof to the  Certificateholders  at their respective addresses
appearing in the Certificate Register and each Rating Agency.

      (b) No  later  than  60 days  after  the  occurrence  of any  event  which
constitutes or which,  with notice or lapse of time or both,  would constitute a
Servicer  Event of  Termination or within five Business Days after a Responsible
Officer of the Trustee  becomes aware of the  occurrence  of such an event,  the
Trustee  shall  transmit  by  mail  to all  Certificateholders  notice  of  such
occurrence  unless such default or Servicer Event of Termination shall have been
waived or cured.

      SECTION 7.05. Survivability of Servicer Liabilities.

      Notwithstanding  anything herein to the contrary,  upon termination of the
Servicer hereunder,  any liabilities of the Servicer which accrued prior to such
termination shall survive such termination.


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                                  ARTICLE VIII

                                   THE TRUSTEE

      SECTION 8.01. Duties of Trustee.

      The Trustee,  prior to the  occurrence of a Servicer  Event of Termination
and  after the  curing of all  Servicer  Events  of  Termination  which may have
occurred,  undertakes  to  perform  such  duties  and only  such  duties  as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred  (which  has not  been  cured)  of  which  a  Responsible  Officer  has
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement,  and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.

      The Trustee,  upon receipt of all resolutions,  certificates,  statements,
opinions,  reports,  documents,  orders or other  instruments  furnished  to the
Trustee  which  are  specifically  required  to be  furnished  pursuant  to  any
provision  of this  Agreement,  shall  examine  them to  determine  whether they
conform on their face to the requirements of this Agreement;  provided, however,
that the Trustee will not be responsible for the accuracy or content of any such
resolutions,  certificates,  statements,  opinions,  reports, documents or other
instruments.  If any such  instrument is found not to conform on its face to the
requirements  of this Agreement in a material manner the Trustee shall take such
action as it deems  appropriate  to have the  instrument  corrected,  and if the
instrument  is not  corrected to the  Trustee's  satisfaction,  the Trustee will
provide notice thereof to the Certificateholders.

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

            (i) prior to the occurrence of a Servicer Event of Termination,  and
      after the curing of all such Servicer Events of Termination which 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 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, in
      the  absence  of bad faith on the part of the  Trustee,  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;

            (ii) the Trustee  shall not be liable for an error of judgment  made
      in good faith by a Responsible Officer of the Trustee,  unless it shall be
      proved that the Trustee was negligent in ascertaining or investigating the
      facts related thereto;

            (iii) the  Trustee  shall not be liable  with  respect to any action
      taken,  suffered or omitted to be taken by it in good faith in  accordance
      with the  direction  of the  Majority  Certificateholders  relating to the
      time, method and place of conducting any proceeding for


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      any remedy available to the Trustee, or exercising or omitting to exercise
      any trust or power conferred upon the Trustee, under this Agreement; and

            (iv) the Trustee shall not be charged with  knowledge of any failure
      by the Servicer to comply with the obligations of the Servicer referred to
      in clauses  (i)  through  (iv) of  Section  7.01(a)  unless a  Responsible
      Officer of the  Trustee  at the  Corporate  Trust  Office  obtains  actual
      knowledge of such failure or the Trustee receives,  at the Corporate Trust
      Office,  written  notice of such failure from the Servicer or the Majority
      Certificateholders.

      The  Trustee  shall  not be  required  to  expend or risk its own funds or
otherwise  incur  financial  liability in the  performance  of any of its duties
hereunder,  or in the  exercise  of any of its  rights  or  powers,  if there is
reasonable  ground for  believing  that the  repayment of such funds or adequate
indemnity  against such risk or liability is not  reasonably  assured to it, and
none of the provisions  contained in this  Agreement  shall in any event require
the Trustee to perform,  or be responsible for the manner of performance of, any
of the  obligations  of the Servicer  under this  Agreement,  except during such
time,  if any, as the Trustee  shall be the successor to, and be vested with the
rights,  duties,  powers and privileges of, the Servicer in accordance  with the
terms of this Agreement.

      SECTION 8.02. Certain Matters Affecting the Trustee.

      (a) Except as otherwise provided in Section 8.01:

            (i) the Trustee may request and rely upon, and shall be protected in
      acting  or  refraining  from  acting  upon,  any   resolution,   Officers'
      Certificate,  certificate of auditors or any other certificate, statement,
      instrument,  opinion, report, notice, request,  consent, order, appraisal,
      bond or other  paper or document  reasonably  believed by it to be genuine
      and to have been signed or presented  by the proper party or parties,  and
      the manner of obtaining  consents and of evidencing the  authorization  of
      the  execution  thereof  by  Certificateholders  shall be  subject to such
      reasonable regulations as the Trustee may prescribe;

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

            (iii) the Trustee  shall be under no  obligation  to exercise any of
      the  rights or powers  vested in it by this  Agreement,  or to  institute,
      conduct or defend any litigation  hereunder or in relation hereto,  at the
      request, order or direction of any of the Certificateholders,  pursuant to
      the provisions of this  Agreement,  unless such  Certificateholders  shall
      have offered to the Trustee  reasonable  security or indemnity against the
      costs,  expenses and liabilities which may be incurred therein or thereby;
      the right of the Trustee to perform any  discretionary  act  enumerated in
      this Agreement shall not be construed as a duty, and the Trustee shall not
      be answerable for other than its  negligence or willful  misconduct in the
      performance of any such act;


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<PAGE>


            (iv) the Trustee shall not be liable for any action taken,  suffered
      or omitted  by it in good faith and  believed  by it to be  authorized  or
      within  the  discretion  or  rights or  powers  conferred  upon it by this
      Agreement;

            (v) prior to the occurrence of a Servicer  Event of Termination  and
      after the  curing of all  Servicer  Events of  Termination  which 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 documents,  unless requested in writing to do so by
      the Majority  Certificateholders;  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 security afforded to it by the terms of this Agreement,
      the Trustee may require reasonable indemnity against such cost, expense or
      liability  as a condition to such  proceeding.  Nothing in this clause (v)
      shall  derogate  from  the  obligation  of the  Servicer  to  observe  any
      applicable  law  prohibiting   disclosure  of  information  regarding  the
      Mortgagors;

            (vi) the Trustee shall not be  accountable,  shall have no liability
      and makes no representation  as to any acts or omissions  hereunder of the
      Servicer until such time as the Trustee may be required to act as Servicer
      pursuant to Section 7.02 and  thereupon  only for the acts or omissions of
      the Trustee as successor Servicer;

            (vii) the Trustee may execute any of the trusts or powers  hereunder
      or perform any duties hereunder either directly or by or through agents or
      attorneys or a custodian; and

            (viii) the right of the  Trustee to perform  any  discretionary  act
      enumerated  in this  Agreement  shall not be construed as a duty,  and the
      Trustee shall not be answerable  for other than its  negligence or willful
      misconduct in the performance of such act.

      (b) The  Depositor  hereby  directs the  Trustee to  execute,  deliver and
perform  its  obligations  under  the  Cap  Contract  on the  Closing  Date  and
thereafter on behalf of the Holders of the Class A  Certificates,  the Mezzanine
Certificates  and the Class B  Certificates.  The  Seller,  the  Depositor,  the
Servicer and the Holders of the Class A Certificates, the Mezzanine Certificates
and  the  Class  B  Certificates  by  their  acceptance  of  such   Certificates
acknowledge  and agree that the Trustee shall  execute,  deliver and perform its
obligations  under the Cap  Contract  and shall do so solely in its  capacity as
Trustee of the Trust Fund and not in its individual capacity.

      SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.

      The  recitals  contained  herein and in the  Certificates  (other than the
authentication  of the  Trustee  on the  Certificates)  shall  be  taken  as the
statements of the Depositor,  and the Trustee assumes no responsibility  for the
correctness of the same. The Trustee makes no representations as to the validity
or  sufficiency  of  this  Agreement  or of the  Certificates  (other  than  the
signature  and  authentication  of the  Trustee on the  Certificates)  or of any
Mortgage Loan or related document.  The Trustee shall not be accountable for the
use or application  by the Servicer,  or for the use or application of any funds
paid to the  Servicer  in  respect  of the  Mortgage  Loans or  deposited  in or


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withdrawn from the Collection  Account by the Servicer.  The Trustee shall at no
time have any  responsibility  or liability for or with respect to the legality,
validity  and  enforceability  of any  Mortgage  or any  Mortgage  Loan,  or the
perfection  and  priority  of any  Mortgage  or  the  maintenance  of  any  such
perfection and priority,  or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to  Certificateholders
under this Agreement,  including,  without limitation: the existence,  condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard  insurance  thereon (other than if the Trustee shall assume the duties of
the Servicer  pursuant to Section  7.02);  the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment;  the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer  pursuant to Section
7.02);  the  compliance  by the  Depositor,  the Seller or the Servicer with any
warranty or representation  made under this Agreement or in any related document
or the accuracy of any such  warranty or  representation  prior to the Trustee's
receipt of notice or other  discovery  of any non-  compliance  therewith or any
breach thereof;  any investment of monies by or at the direction of the Servicer
or any loss  resulting  therefrom,  it being  understood  that the Trustee shall
remain  responsible  for any Trust  property that it may hold in its  individual
capacity;  the  acts or  omissions  of any of the  Servicer  (other  than if the
Trustee shall assume the duties of the Servicer  pursuant to Section 7.02),  any
Sub-Servicer  or any  Mortgagor;  any action of the Servicer  (other than if the
Trustee shall assume the duties of the Servicer  pursuant to Section  7.02),  or
any Sub- Servicer taken in the name of the Trustee;  the failure of the Servicer
or any  Sub-Servicer to act or perform any duties required of it as agent of the
Trustee hereunder;  or any action by the Trustee taken at the instruction of the
Servicer  (other than if the  Trustee  shall  assume the duties of the  Servicer
pursuant to Section  7.02);  provided,  however,  that the  foregoing  shall not
relieve  the  Trustee  of its  obligation  to  perform  its  duties  under  this
Agreement,  including,  without  limitation,  the  Trustee's  duty to review the
Mortgage   Files   pursuant  to  Section   2.01.   The  Trustee  shall  have  no
responsibility for filing any financing or continuation  statement in any public
office at any time or to  otherwise  perfect or maintain the  perfection  of any
security interest or lien granted to it hereunder (unless the Trustee shall have
become the successor Servicer).

      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
Trustee and may transact any banking and trust business with the Originator, the
Servicer, the Depositor or their Affiliates.

      SECTION 8.05. Trustee Fee and Expenses.

      (a) The  Trustee  shall  withdraw  from the  Distribution  Account on each
Distribution Date and pay to itself the Trustee Fee and any Trustee Reimbursable
Expenses.  The  Trustee,  and any  director,  officer,  employee or agent of the
Trustee,  shall be  indemnified  by REMIC 1 and held harmless  against any loss,
liability or  "unanticipated  out-of-pocket"  expense  incurred or paid to third
parties  (which  expenses  shall not  include  salaries  paid to  employees,  or
allocable overhead, of the Trustee) incurred by the Trustee arising out of or in
connection with the acceptance or  administration  of its obligations and duties
under this  Agreement,  other than any loss,  liability or expense (i) resulting
from the Servicer's  actions or omissions in connection  with this Agreement and
the Mortgage Loans for which the Trustee is indemnified  under Section  8.05(b),
(ii) that constitutes


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<PAGE>

a specific  liability  of the Trustee  under this  Agreement  or (iii) any loss,
liability  or expense  incurred by reason of willful  misfeasance,  bad faith or
negligence  of the  Trustee in the  performance  of its duties  hereunder  or by
reason  of the  Trustee's  reckless  disregard  of its  obligations  and  duties
hereunder.  Any  amounts  payable  to the  Trustee,  or any  director,  officer,
employee or agent of the Trustee, in respect of the indemnification  provided by
this Section 8.05(a),  or pursuant to any other right of reimbursement  from the
Trust Fund that the Trustee, and any director, officer, employee or agent of the
Trustee,  may have  hereunder in its  capacity as such,  may be withdrawn by the
Trustee from the Distribution Account at any time.

      (b) The  Servicer  agrees  to  indemnify  the  Trustee  and any  director,
officer,  employee or agent of the Trustee from,  and hold it harmless  against,
any  loss,  liability  or  expense  resulting  from a breach  of the  Servicer's
obligations  and duties under this  Agreement.  Such indemnity shall survive the
termination or discharge of this Agreement and the resignation or removal of the
Trustee or the Servicer for actions prior to such  resignation  or removal.  Any
payment  hereunder  made by the  Servicer  to the  Trustee  shall  be  from  the
Servicer's own funds, without reimbursement from the Trust Fund therefor.

      SECTION 8.06. Eligibility Requirements for Trustee.

      The Trustee  hereunder  shall at all times be an entity duly organized and
validly  existing  under the laws of the  United  States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least  $50,000,000 and subject to supervision
or examination by federal or state authority.  If such entity publishes  reports
of condition at least  annually,  pursuant to law or to the  requirements of any
aforesaid  supervising  or  examining  authority,  then for the purposes of this
Section 8.06, the combined capital and surplus of such entity shall be deemed to
be its  combined  capital and surplus as set forth in its most recent  report of
condition so  published.  The  principal  office of the Trustee  (other than the
initial Trustee) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee at the time such Trustee is appointed Trustee
to the effect that the Trust will not be a taxable entity under the laws of such
state.  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.

      SECTION 8.07. Resignation or Removal of Trustee.

      The  Trustee  may at any time  resign  and be  discharged  from the trusts
hereby created by giving  written notice thereof to the Depositor,  the Servicer
and each Rating Agency. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument,  in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the  successor  Trustee.  If no  successor  Trustee  shall  have been so
appointed and have accepted  appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

      If at any time the Trustee shall cease to be eligible in  accordance  with
the  provisions of Section 8.06 and shall fail to resign after  written  request
therefor by the Depositor, or if at any


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time the Trustee shall be legally unable to act, or shall be adjudged a 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,  then the Depositor or the Servicer may remove the Trustee.  If the
Depositor  or the  Servicer  removes  the  Trustee  under the  authority  of the
immediately preceding sentence, the Depositor shall promptly appoint a successor
Trustee by written instrument,  in duplicate, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee.

      The  Majority  Certificateholders  may at any time  remove the  Trustee by
written instrument or instruments  delivered to the Servicer,  the Depositor and
the Trustee;  the  Depositor  shall  thereupon use its best efforts to appoint a
successor trustee in accordance with this Section.

      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 not become
effective until  acceptance of appointment by the successor  Trustee as provided
in Section 8.08.

      SECTION 8.08. Successor Trustee.

      Any successor Trustee appointed as provided in Section 8.07 shall execute,
acknowledge  and deliver to the Depositor,  the Servicer and to its  predecessor
Trustee an instrument  accepting such appointment  hereunder,  and thereupon the
resignation or removal of 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 like effect as if originally named as Trustee. The
Depositor,  the Servicer and the  predecessor  Trustee shall execute and deliver
such  instruments  and do such other  things as may  reasonably  be required for
fully and certainly  vesting and  confirming  in the successor  Trustee all such
rights, powers, duties and obligations.

      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 and the  appointment  of such
successor Trustee shall not result in a downgrading of the Regular  Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

      Upon acceptance of appointment by a successor  Trustee as provided in this
Section 8.08,  the successor  Trustee shall mail notice of the  appointment of a
successor Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to each Rating Agency.

      SECTION 8.09. Merger or Consolidation of Trustee.

      Any entity into which the Trustee may be merged or converted or with which
it may be consolidated,  or any entity resulting from any merger,  conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
the business of the Trustee,  shall be the  successor of the Trustee  hereunder,
provided such entity shall be eligible  under the provisions of Section 8.06


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and 8.08, without the execution or filing of any paper or any further act on the
part  of  any  of  the  parties   hereto,   anything   herein  to  the  contrary
notwithstanding.

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

      Notwithstanding  any other provisions of this Agreement,  at any time, for
the purpose of meeting any legal  requirements of any  jurisdiction in which any
part of the Trust or any  Mortgaged  Property  may at the time be  located,  the
Servicer and the Trustee  acting  jointly shall have the power and shall execute
and  deliver all  instruments  to appoint  one or more  Persons  approved by the
Trustee to act as co-  trustee or  co-trustees,  jointly  with the  Trustee,  or
separate trustee or separate  trustees,  of all or any part of the Trust, and to
vest in such  Person or  Persons,  in such  capacity  and for the benefit of the
Certificateholders,  such title to the Trust, or any part thereof,  and, subject
to the other provisions of this Section 8.10, such powers, duties,  obligations,
rights and trusts as the  Servicer  and the Trustee may  consider  necessary  or
desirable.  Any such  co-trustee  or  separate  trustee  shall be subject to the
written approval of the Servicer.  If the Servicer shall not have joined in such
appointment  within 15 days after the receipt by it of a request so to do, or in
the case a Servicer Event of Termination  shall have occurred and be continuing,
the Trustee alone 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. The Servicer  shall be responsible  for the fees of any co-trustee
or separate trustee appointed hereunder.

      Every separate  trustee and co-trustee  shall, to the extent  permitted by
law, be appointed and act subject to the following provisions and conditions:

            (i) all rights,  powers, duties and obligations conferred or imposed
      upon the Trustee  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  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 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;

            (ii) no trustee  hereunder shall be held personally liable by reason
      of any act or omission of any other trustee hereunder; and

            (iii) the Servicer and the Trustee,  acting jointly, may at any time
      accept the  resignation  of or remove any separate  trustee or  co-trustee
      except that following the  occurrence of a Servicer Event of  Termination,
      the Trustee acting alone may accept the resignation 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.


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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 Depositor and the Servicer.

      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. Limitation of Liability.

      The  Certificates  are  executed  by the  Trustee,  not in its  individual
capacity  but solely as Trustee of the Trust,  in the exercise of the powers and
authority  conferred upon and vested in it by the Trust  Agreement.  Each of the
undertakings  and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal  undertaking  or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.

      SECTION  8.12.   Trustee  May  Enforce   Claims   Without   Possession  of
Certificates.

      (a)  All  rights  of  action  and  claims  under  this  Agreement  or  the
Certificates  may  be  prosecuted  and  enforced  by  the  Trustee  without  the
possession  of  any  of  the  Certificates  or  the  production  thereof  in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its  capacity as Trustee for the benefit of all
Holders of such Certificates,  subject to the provisions of this Agreement.  Any
recovery of judgment  shall,  after  provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel,  be for the  ratable  benefit of the  Certificateholders  in respect of
which such judgment has been recovered.

      (b) The Trustee shall afford the Seller,  the Depositor,  the Servicer and
each  Certificateholder  upon  reasonable  notice during normal  business hours,
access to all  records  maintained  by the  Trustee  in  respect  of its  duties
hereunder and access to officers of the Trustee  responsible for performing such
duties. Upon request, the Trustee shall furnish the Depositor,  the Servicer and
any requesting  Certificateholder with its most recent financial statements. The
Trustee shall cooperate fully with the Seller,  the Servicer,  the Depositor and
such Certificateholder and shall make available to the Seller, the Servicer, the
Depositor  and  such  Certificateholder  for  review  and  copying  such  books,
documents or records as may be requested  with respect to the  Trustee's  duties
hereunder.  The Seller, the Depositor,  the Servicer and the  Certificateholders
shall not have any  responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.


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      SECTION 8.13. Suits for Enforcement.

      In case a Servicer  Event of  Termination or other default by the Servicer
or the Depositor hereunder shall occur and be continuing,  the Trustee shall, at
the written  direction of the  Majority  Certificateholders,  or otherwise  may,
proceed   to   protect   and   enforce   its   rights  and  the  rights  of  the
Certificateholders  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 and the Certificateholders.

      SECTION 8.14. Waiver of Bond Requirement.

      The  Trustee  shall be  relieved  of,  and each  Certificateholder  hereby
waives,  any  requirement of any  jurisdiction  in which the Trust,  or any part
thereof,  may be located  that the Trustee  post a bond or other surety with any
court, agency or body whatsoever.

      SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.

      The  Trustee  shall be  relieved  of,  and each  Certificateholder  hereby
waives,  any  requirement of any  jurisdiction  in which the Trust,  or any part
thereof,  may be located  that the Trustee  file any  inventory,  accounting  or
appraisal  of the  Trust  with any  court,  agency or body at any time or in any
manner whatsoever.




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                                   ARTICLE IX

                              REMIC ADMINISTRATION

      SECTION 9.01. REMIC Administration.

      (a) REMIC  elections as set forth in the  Preliminary  Statement  shall be
made by the Trustee on Form 1066 or other appropriate federal tax or information
return for the taxable year ending on the last day of the calendar year in which
the Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.

      (b) The Closing Date is hereby  designated  as the  "Startup  Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code.

      (c) The Servicer shall pay any and all tax-related expenses (not including
taxes) of each  REMIC,  including  but not limited to any  professional  fees or
expenses related to audits or any  administrative  or judicial  proceedings with
respect to each REMIC that  involve the  Internal  Revenue  Service or state tax
authorities,  but only to the extent  that (i) such  expenses  are  ordinary  or
routine  expenses,  including  expenses of a routine  audit but not  expenses of
litigation  (except as described in (ii));  or (ii) such expenses or liabilities
(including  taxes and penalties) are  attributable  to the negligence or willful
misconduct  of the Servicer in  fulfilling  its duties  hereunder.  The Servicer
shall be entitled to  reimbursement of expenses to the extent provided in clause
(i) above from the Collection Account.

      (d) The Trustee shall prepare,  sign and file, all of the REMICs'  federal
and  state tax and  information  returns  (including  Form  8811) as the  direct
representative  of each REMIC created  hereunder.  The expenses of preparing and
filing such returns shall be borne by the Trustee.

      (e) The Holder of the Class R Certificate  at any time holding the largest
Percentage  Interest thereof shall be the "tax matters person" as defined in the
REMIC  Provisions (the "Tax Matters Person") with respect to REMIC 1 and REMIC 2
and shall act as the Tax  Matters  Person for REMIC 1 and REMIC 2. The Holder of
the Class R-X  Certificate at any time holding the largest  Percentage  Interest
thereof shall be the Tax Matters  Person with respect to REMIC 3 and REMIC 4 and
shall act as the Tax  Matters  Person for REMIC 3 and REMIC 4. The  Trustee,  as
agent for the Tax  Matters  Person,  shall  perform  on behalf of each REMIC all
reporting and other tax compliance  duties that are the  responsibility  of such
REMIC under the Code, the REMIC Provisions or other  compliance  guidance issued
by the Internal  Revenue Service or any state or local taxing  authority.  Among
its other duties, if required by the Code, the REMIC  Provisions,  or other such
guidance, the Trustee, as agent for the Tax Matters Person, shall provide (i) to
the Treasury or other  governmental  authority such  information as is necessary
for  the  application  of  any  tax  relating  to  the  transfer  of a  Residual
Certificate  to  any  disqualified  person  or  organization  and  (ii)  to  the
Certificateholders  such  information  or reports as are required by the Code or
REMIC  Provisions.  The  Trustee,  as agent for the Tax  Matters  Person,  shall
represent each REMIC 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,  enter  into
settlement  agreements with any government taxing agency,  extend any statute of
limitations relating to any item


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of any REMIC and  otherwise  act on behalf of any REMIC in  relation  to any tax
matter involving the Trust.

      (f) The Trustee,  the Servicer and the Holders of Certificates  shall take
any action or cause the REMIC to take any action necessary to create or maintain
the status of each REMIC as a REMIC under the REMIC  Provisions and shall assist
each other as necessary to create or maintain such status.  Neither the Trustee,
the Servicer nor the Holder of any Residual  Certificate  shall take any action,
cause any REMIC created hereunder to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions,  if taken or not
taken,  as the case may be,  could (i)  endanger  the  status of such REMIC as a
REMIC or (ii) result in the  imposition of a tax upon such REMIC  (including but
not limited to the tax on  prohibited  transactions  as defined in Code  Section
860F(a)(2) and the tax on prohibited  contributions set forth on Section 860G(d)
of the Code) (either such event,  an "Adverse  REMIC Event")  unless the Trustee
and the  Servicer  have  received  an Opinion of Counsel  (at the expense of the
party  seeking to take such action) to the effect that the  contemplated  action
will not  endanger  such  status or result in the  imposition  of such a tax. In
addition, prior to taking any action with respect to any REMIC created hereunder
or the assets  therein,  or causing such REMIC to take any action,  which is not
expressly permitted under the terms of this Agreement,  any Holder of a Residual
Certificate will consult with the Trustee and the Servicer,  or their respective
designees,  in  writing,  with  respect to whether  such  action  could cause an
Adverse REMIC Event to occur with respect to any REMIC, and no such Person shall
take any such  action or cause any REMIC to take any such action as to which the
Trustee or the Servicer  has advised it in writing  that an Adverse  REMIC Event
could occur.

      (g) Each Holder of a Residual  Certificate  shall pay when due any and all
taxes imposed on each REMIC created  hereunder by federal or state  governmental
authorities.  To the  extent  that such  Trust  taxes are not paid by a Residual
Certificateholder,  the  Trustee  shall  pay any  remaining  REMIC  taxes out of
current or future amounts otherwise  distributable to the Holder of the Residual
Certificate  in the REMICs or, if no such  amounts are  available,  out of other
amounts held in the  Distribution  Account,  and shall reduce amounts  otherwise
payable to Holders of regular  interests  in the related  REMIC.  Subject to the
foregoing,  in the event  that a REMIC  incurs a state or local  tax,  including
franchise taxes, as a result of a determination  that such REMIC is domiciled in
the State of California  for state tax purposes by virtue of the location of the
Servicer,  the Servicer  agrees to pay on behalf of such REMIC when due, any and
all state and local taxes  imposed as a result of such a  determination,  in the
event  that the Holder of the  related  Residual  Certificate  fails to pay such
taxes, if any, when imposed.

      (h) The Trustee,  as agent for the Tax Matters Person,  shall, for federal
income tax  purposes,  maintain  books and  records  with  respect to each REMIC
created hereunder on a calendar year and on an accrual basis.

      (i) No  additional  contributions  of  assets  shall be made to any  REMIC
created  hereunder,  except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.

      (j) Neither the Trustee nor the Servicer shall enter into any  arrangement
by which any REMIC created  hereunder  will receive a fee or other  compensation
for services.


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      (k) [Reserved].

      (l) The Trustee will apply for an Employee  Identification Number from the
Internal Revenue Service via a Form SS-4 or other acceptable  method for all tax
entities and shall complete Form 8811.

      SECTION 9.02. Prohibited Transactions and Activities.

      Neither the  Depositor,  the Servicer nor the Trustee shall sell,  dispose
of,  or  substitute  for any of the  Mortgage  Loans,  except  in a  disposition
pursuant to (i) the  foreclosure of a Mortgage Loan,  (ii) the bankruptcy of the
Trust Fund,  (iii) the  termination of any REMIC created  hereunder  pursuant to
Article X of this Agreement,  (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage  Loans  pursuant to Article II of this
Agreement,  nor  acquire  any assets  for any REMIC,  nor sell or dispose of any
investments in the Distribution  Account for gain, nor accept any  contributions
to either  REMIC after the Closing  Date,  unless it has  received an Opinion of
Counsel  (at the  expense  of the  party  causing  such  sale,  disposition,  or
substitution) that such disposition,  acquisition,  substitution,  or acceptance
will not (a) affect  adversely  the status of any REMIC  created  hereunder as a
REMIC or of the interests  therein other than the Residual  Certificates  as the
regular interests therein,  (b) affect the distribution of interest or principal
on the Certificates,  (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause any REMIC  created  hereunder to be subject to a tax on  prohibited
transactions or prohibited contributions pursuant to the REMIC Provisions.

      SECTION  9.03.  Indemnification  with Respect to Certain Taxes and Loss of
                      REMIC Status.

      (a) In the event that any REMIC  fails to  qualify  as a REMIC,  loses its
status as a REMIC,  or  incurs  federal,  state or local  taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent  performance by the Servicer of its duties and  obligations set
forth  herein,  the  Servicer  shall  indemnify  the  Trustee and the Trust Fund
against any and all losses, claims, damages,  liabilities or expenses ("Losses")
resulting from such negligence;  provided,  however, that the Servicer shall not
be liable for any such  Losses  attributable  to the action or  inaction  of the
Trustee, the Depositor or the Holder of the Residual Certificate, as applicable,
nor for any such  Losses  resulting  from  misinformation  provided  by any such
Person on which the Servicer has relied.  The  foregoing  shall not be deemed to
limit or  restrict  the  rights  and  remedies  of the  Holder of such  Residual
Certificate now or hereafter existing at law or in equity.  Notwithstanding  the
foregoing,  however,  in no event shall the Servicer  have any liability (1) for
any action or omission that is taken in accordance  with and in compliance  with
the  express  terms of, or which is  expressly  permitted  by the terms of, this
Agreement,  (2) for any Losses other than arising out of a negligent performance
by the Servicer of its duties and obligations set forth herein,  and (3) for any
special or consequential damages to  Certificateholders  (in addition to payment
of principal and interest on the Certificates).

      (b) In the event that any REMIC  fails to  qualify  as a REMIC,  loses its
status as a REMIC,  or  incurs  federal,  state or local  taxes as a result of a
prohibited transaction or prohibited


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contribution under the REMIC Provisions due to the negligent  performance by the
Trustee  of its duties and  obligations  set forth  herein,  the  Trustee  shall
indemnify  the Servicer and the Trust Fund against any and all Losses  resulting
from such negligence;  provided,  however,  that the Trustee shall not be liable
for any such Losses attributable to the action or inaction of the Servicer,  the
Depositor or the Holder of the Residual Certificate,  as applicable, nor for any
such Losses resulting from  misinformation  provided by any such Person on which
the Trustee has relied.  The foregoing  shall not be deemed to limit or restrict
the  rights  and  remedies  of the Holder of such  Residual  Certificate  now or
hereafter existing at law or in equity.  Notwithstanding the foregoing, however,
in no event shall the Trustee have any  liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent  performance  by the Trustee of its duties
and  obligations  set forth  herein,  and (3) for any  special or  consequential
damages to Certificateholders  (in addition to payment of principal and interest
on the Certificates).



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                                    ARTICLE X

                                   TERMINATION

      SECTION 10.01. Termination.

      (a) The respective  obligations and responsibilities of the Servicer,  the
Depositor  and the Trustee  created  hereby  (other than the  obligation  of the
Trustee  to  make  certain  payments  to  Certificateholders   after  the  final
Distribution  Date,  the  obligation of the Servicer to send certain  notices as
hereinafter set forth and the indemnification obligations of the Servicer to the
Trustee  hereunder) shall terminate upon notice to the Trustee upon the earliest
of (i) the Distribution Date on which the Certificate  Principal Balances of the
Regular  Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust,  (iii) the optional purchase
by the Terminator  (as defined  below) of the Mortgage Loans as described  below
and (iv) the Distribution Date in July 2034.  Notwithstanding the foregoing,  in
no event shall the trust created  hereby  continue  beyond 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.

      The majority Holder of the Class C Certificates (unless such Holder is the
Seller,  Greenwich Capital Markets,  Inc. or an Affiliate of either of them), or
if such Holder (x) fails to exercise such option or (y) is the Seller, Greenwich
Capital Markets,  Inc. or an Affiliate of either of them, the Servicer (with the
written consent of the Depositor or an Affiliate thereof, such consent not to be
unreasonably  withheld) (either such Holder or the Servicer, as applicable,  the
"Terminator"), may, at its option, terminate this Agreement on any date on which
the  aggregate of the Stated  Principal  Balances of the  Mortgage  Loans (after
giving  effect to  scheduled  payments of  principal  due during the related Due
Period,  to the extent  received or advanced,  and  unscheduled  collections  of
principal  received during the related  Prepayment Period) on such date is equal
to or less than 10% of the aggregate  Stated  Principal  Balance of the Original
Mortgage  Loans on the  Cut-off  Date,  by  purchasing,  on the next  succeeding
Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a
price equal to the greater of (i) the Stated  Principal  Balance of the Mortgage
Loans  and the  appraised  value of any REO  Properties,  such  appraisal  to be
conducted by an Independent appraiser mutually agreed upon by the Terminator and
the Trustee in their reasonable discretion and (ii) the fair market value of the
Mortgage Loans and the REO  Properties (as determined by the Terminator  and, to
the extent that the Floating Rate Certificates will not receive all amounts owed
to it as a result of the termination,  the Trustee,  as of the close of business
on the third  Business Day next preceding the date upon which notice of any such
termination is furnished to the related  Certificateholders  pursuant to Section
10.01(c)), in each case plus accrued and unpaid interest thereon at the weighted
average of the Mortgage  Rates  through the end of the Due Period  preceding the
final  Distribution Date plus unreimbursed  Servicing  Advances,  Advances,  any
unpaid  Servicing  Fees  allocable to such Mortgage Loans and REO Properties and
any accrued and unpaid Net WAC Rate Carryover Amount (the "Termination  Price");
provided, however, such option may only be exercised if the Termination Price is
sufficient  to pay all  interest  accrued  on, as well as amounts  necessary  to
retire the note balance of, each class of notes issued pursuant to an indenture,
secured, at least in part, by the Class C Certificates, the Class P Certificates
and/or the Residual Certificates.


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<PAGE>


      In connection with any such purchase pursuant to the preceding  paragraph,
the  Terminator  shall deposit in the  Distribution  Account all amounts then on
deposit  in the  Collection  Account,  which  deposit  shall be  deemed  to have
occurred immediately preceding such purchase.

      Any such purchase shall be accomplished  by deposit into the  Distribution
Account  on  the  Determination  Date  before  such  Distribution  Date  of  the
Termination Price.

      (b) Notice of any  termination,  specifying the  Distribution  Date (which
shall be a date that  would  otherwise  be a  Distribution  Date) upon which the
Certificateholders  may surrender their  Certificates to the Trustee for payment
of the final  distribution  and  cancellation,  shall be given  promptly  by the
Trustee upon the Trustee  receiving notice of such date from the Terminator,  by
letter to the  Certificateholders  mailed not earlier  than the 15th day and not
later  than the 25th day of the month  next  preceding  the month of such  final
distribution  specifying (1) the Distribution Date upon which final distribution
of the  Certificates  will be  made  upon  presentation  and  surrender  of such
Certificates at the office or agency of the Trustee therein designated,  (2) the
amount of any such final  distribution  and (3) that the Record  Date  otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office or agency
of the Trustee therein specified.

      (c) Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Holders of the  Certificates on the  Distribution
Date for such final distribution,  in proportion to the Percentage  Interests of
their  respective  Class and to the  extent  that funds are  available  for such
purpose,  an amount  equal to the  amount  required  to be  distributed  to such
Holders in accordance with the provisions of Section 4.01 for such  Distribution
Date. By acceptance  of the Residual  Certificates,  the Holders of the Residual
Certificates agree, in connection with any termination hereunder,  to assign and
transfer  any amounts in excess of the par value of the Mortgage  Loans,  and to
the extent received in respect of such  termination,  to pay any such amounts to
the Holders of the Class C Certificates.

      (d) In the event that all  Certificateholders  shall not  surrender  their
Certificates  for  final  payment  and  cancellation  on or  before  such  final
Distribution  Date,  the Trustee shall  promptly  following  such date cause all
funds in the  Distribution  Account not  distributed  in final  distribution  to
Certificateholders  to be  withdrawn  therefrom  and  credited to the  remaining
Certificateholders  by  depositing  such  funds in a  separate  account  for the
benefit  of such  Certificateholders,  and the  Servicer  (if the  Servicer  has
exercised its right to purchase the Mortgage Loans) or the Trustee (in any other
case) shall give a second written notice to the remaining Certificateholders, to
surrender their Certificates for cancellation and receive the final distribution
with  respect  thereto.  If within nine months  after the second  notice all the
Certificates  shall not have been  surrendered  for  cancellation,  the Residual
Certificateholders  shall be entitled to all  unclaimed  funds and other  assets
which remain subject  hereto,  and the Trustee upon transfer of such funds shall
be discharged of any responsibility  for such funds, and the  Certificateholders
shall look to the Residual Certificateholders for payment.

      SECTION 10.02. Additional Termination Requirements.

      (a) In the event that the  Terminator  exercises  its  purchase  option as
provided in Section 10.01, each REMIC shall be terminated in accordance with the
following additional


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requirements,  unless the Trustee shall have been  furnished  with an Opinion of
Counsel  to the  effect  that  the  failure  of the  Trust  to  comply  with the
requirements  of this Section will not (i) result in the  imposition of taxes on
"prohibited transactions" of the Trust as defined in Section 860F of the Code or
(ii) cause any REMIC constituting part of the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are outstanding:

            (i)  Within  90 days  prior  to the  final  Distribution  Date,  the
      Terminator  shall  adopt and the  Trustee  shall  sign a plan of  complete
      liquidation of each REMIC created  hereunder meeting the requirements of a
      "Qualified Liquidation" under Section 860F of the Code and any regulations
      thereunder; and

            (ii) At or after  the time of  adoption  of such a plan of  complete
      liquidation  and at or prior to the final  Distribution  Date, the Trustee
      shall sell all of the assets of the Trust Fund to the  Terminator for cash
      pursuant to the terms of the plan of complete liquidation.

      (b) By their acceptance of Certificates,  the Holders thereof hereby agree
to appoint  the  Trustee as their  attorney in fact to: (i) adopt such a plan of
complete liquidation (and the  Certificateholders  hereby appoint the Trustee as
their attorney in fact to sign such plan) as  appropriate  and (ii) to take such
other action in connection  therewith as may be reasonably required to carry out
such plan of complete liquidation all in accordance with the terms hereof.



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                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

      SECTION 11.01. Amendment.

      This  Agreement  may be amended  from time to time by the  Depositor,  the
Servicer and the Trustee; and without the consent of the  Certificateholders (i)
to cure any ambiguity, (ii) to correct or supplement any provisions herein which
may be defective or  inconsistent  with any other  provisions  herein,  (iii) to
amend the  provisions  of Section  3.22(b) or (iv) to make any other  provisions
with respect to matters or questions  arising under this  Agreement  which shall
not be inconsistent  with the provisions of this  Agreement;  provided that such
action shall not, as evidenced by either (a) an Opinion of Counsel  delivered to
the Trustee or (b) written notice to the Depositor, the Servicer and the Trustee
from each Rating  Agency that such  action will not result in the  reduction  or
withdrawal of the rating of any outstanding  Class of Certificates  with respect
to which it is a Rating  Agency,  adversely  affect in any material  respect the
interests of any  Certificateholder.  No amendment  shall be deemed to adversely
affect in any material respect the interests of any  Certificateholder who shall
have consented thereto,  and no Opinion of Counsel or Rating Agency confirmation
shall be  required  to  address  the  effect of any such  amendment  on any such
consenting Certificateholder.  Notwithstanding the foregoing, neither an Opinion
of Counsel nor written  notice to the  Depositor,  the  Servicer and the Trustee
from the Rating Agencies will be required in connection with an amendment to the
provisions of Section 3.22(b).

      In  addition,  this  Agreement  may be  amended  from  time to time by the
Depositor,  the  Servicer  and the  Trustee  with the  consent  of the  Majority
Certificateholders  for the purpose of adding any  provisions  to or changing in
any  manner  or  eliminating  any of the  provisions  of  this  Agreement  or of
modifying  in any manner the rights of the  Holders of  Certificates;  provided,
however,  that no such  amendment  or waiver  shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates or distributions
which are  required  to be made on any  Certificate  without  the consent of the
Holder of such  Certificate,  (y) adversely  affect in any material  respect the
interests of the Holders of any Class of  Certificates  (as  evidenced by either
(i) an Opinion of Counsel delivered to the Trustee or (ii) written notice to the
Depositor, the Servicer and the Trustee from each Rating Agency that such action
will not result in the reduction or withdrawal of the rating of any  outstanding
Class of  Certificates  with respect to which it is a Rating Agency) in a manner
other than as described in clause (x) above,  without the consent of the Holders
of Certificates of such Class  evidencing at least a 66% Percentage  Interest in
such Class, or (z) reduce the percentage of Voting Rights required by clause (y)
above without the consent of the Holders of all  Certificates of such Class then
outstanding.  Upon approval of an amendment,  a copy of such amendment  shall be
sent to the Rating Agencies.

      Notwithstanding  any  provision  of this  Agreement to the  contrary,  the
Trustee  shall not consent to any  amendment to this  Agreement  unless it shall
have first received an Opinion of Counsel,  delivered by (and at the expense of)
the Person  seeking such  Amendment,  to the effect that such amendment will not
result in the  imposition of a tax on any REMIC created  hereunder  constituting
part of the  Trust  Fund  pursuant  to the REMIC  Provisions  or cause any REMIC
created


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hereunder  constituting  part of the Trust to fail to  qualify as a REMIC at any
time that any Certificates are outstanding, and that the amendment is being made
in accordance with the terms hereof.

      Promptly  after the  execution  of any such  amendment  the Trustee  shall
furnish,  at the  expense of the Person that  requested  the  amendment  if such
Person  is the  Servicer  (but  in no  event  at the  expense  of the  Trustee),
otherwise at the expense of the Trust,  a copy of such amendment and the Opinion
of Counsel  referred to in the immediately  preceding  paragraph to the Servicer
and each Rating Agency.

      It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment;  instead
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.

      The Trustee may, but shall not be obligated  to, enter into any  amendment
pursuant to this Section  11.01 that affects its rights,  duties and  immunities
under this Agreement or otherwise.

      SECTION 11.02. Recordation of Agreement; Counterparts.

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

      For the purpose of  facilitating  the  recordation  of this  Agreement  as
herein  provided  and  for  other  purposes,  this  Agreement  may  be  executed
simultaneously in any number of counterparts,  each of which  counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.

      SECTION 11.03. Limitation on Rights of Certificateholders.

      The death or incapacity of any Certificateholder  shall not (i) operate to
terminate  this  Agreement or the Trust,  (ii) entitle such  Certificateholder's
legal  representatives  or heirs to claim an accounting or to take any action or
proceeding  in any court for a  partition  or winding up of the Trust,  or (iii)
otherwise  affect the rights,  obligations and liabilities of the parties hereto
or any of them.

      Except as expressly provided for herein, no  Certificateholder  shall have
any  right  to  vote  or in any  manner  otherwise  control  the  operation  and
management of the Trust,  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


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<PAGE>

members  of an  association;  nor  shall  any  Certificateholder  be  under  any
liability  to any third  person by reason of any action  taken by the parties to
this Agreement pursuant to any provision hereof.

      No  Certificateholder  shall have any right by virtue of any  provision of
this  Agreement to institute any suit,  action or proceeding in equity or at law
upon or under or with respect to this Agreement,  unless such Holder  previously
shall  have  given  to the  Trustee  a  written  notice  of  default  and of the
continuance  thereof, as hereinbefore  provided,  and unless also the Holders of
Certificates  entitled  to at least 25% of the  Voting  Rights  shall  have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee  hereunder  and shall have  offered to the Trustee  such
reasonable  indemnity  as  it  may  require  against  the  costs,  expenses  and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action,  suit or  proceeding.  It is understood
and intended,  and expressly  covenanted  by each  Certificateholder  with every
other  Certificateholder  and  the  Trustee,  that  no one or  more  Holders  of
Certificates  shall  have any  right in any  manner  whatever  by  virtue of any
provision of this  Agreement to affect,  disturb or prejudice  the rights of the
Holders  of any  other of such  Certificates,  or to  obtain  or seek to  obtain
priority  over or  preference  to any  other  such  Holder,  which  priority  or
preference is not otherwise  provided for herein,  or to enforce any right under
this Agreement,  except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee  shall be entitled  to such  relief as can be given  either at law or in
equity.

      SECTION 11.04. Governing Law; Jurisdiction.

      This Agreement shall be construed in accordance with the laws of the State
of New York, and the obligations,  rights and remedies of the parties  hereunder
shall be  determined  in  accordance  with such laws.  With respect to any claim
arising out of this Agreement,  each party irrevocably  submits to the exclusive
jurisdiction  of the  courts  of the  State of New York  and the  United  States
District  Court located in the Borough of Manhattan in The City of New York, and
each party irrevocably waives any objection which it may have at any time to the
laying of venue of any suit,  action or  proceeding  arising  out of or relating
hereto  brought in any such courts,  irrevocably  waives any claim that any such
suit,  action or  proceeding  brought in any such court has been  brought in any
inconvenient  forum and  further  irrevocably  waives the right to object,  with
respect to such claim,  suit,  action or  proceeding  brought in any such court,
that such  court  does not have  jurisdiction  over such  party,  provided  that
service of process has been made by any lawful means.

      SECTION 11.05. Notices.

      All  directions,  demands  and notices  hereunder  shall be in writing and
shall be deemed to have been duly given if personally  delivered at or mailed by
first class mail, postage prepaid,  by facsimile or by express delivery service,
to (a) in the case of the  Servicer,  Centex Home Equity  Company,  LLC, 2828 N.
Harwood Street,  11th Floor,  Dallas,  Texas 75201,  Attention:  Chief Financial
Officer,  with a copy to the General Counsel,  or such other address or telecopy
number as may hereafter be furnished to the Depositor and the Trustee in writing
by the Servicer,  (b) in the case of the Trustee,  the  Corporate  Trust Office,
Attention: CHEC 2004-1 or such other address or telecopy number as may hereafter
be furnished to the  Depositor  and the Servicer in writing by the


                                      142
<PAGE>

Trustee, and (c) in the case of the Depositor, Financial Asset Securities Corp.,
600 Steamboat Road,  Greenwich,  Connecticut  06830,  Attention:  Legal, or such
other  address or telecopy  number as may be  furnished  to the Servicer and the
Trustee in writing by the  Depositor.  Any notice  required or  permitted  to be
mailed  to a  Certificateholder  shall be given by  first  class  mail,  postage
prepaid,  at the  address of such Holder as shown in the  Certificate  Register.
Notice of any Servicer  Event of  Termination  shall be given by telecopy and by
certified  mail.  Any  notice  so  mailed  within  the time  prescribed  in this
Agreement  shall be  conclusively  presumed to have duly been given when mailed,
whether or not the Certificateholder  receives such notice. A copy of any notice
required  to be  telecopied  hereunder  shall also be mailed to the  appropriate
party in the manner set forth above.

      SECTION 11.06. Severability of Provisions.

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

      SECTION 11.07. Article and Section References.

      All  article  and  section  references  used  in  this  Agreement,  unless
otherwise provided, are to articles and sections in this Agreement.

      SECTION 11.08. Notice to the Rating Agencies.

      (a) The Trustee  shall be  obligated  to use its best  reasonable  efforts
promptly to provide  notice to the Rating  Agencies  with respect to each of the
following of which a Responsible Officer of the Trustee has actual knowledge:

            (i) any material change or amendment to this Agreement;

            (ii) the occurrence of any Servicer  Event of  Termination  that has
      not been cured or waived;

            (iii) the resignation or termination of the Servicer or the Trustee;

            (iv) the final payment to Holders of the Certificates of any Class;

            (v) any change in the location of the Distribution Account; and

            (vi) if the  Trustee is acting as  successor  Servicer  pursuant  to
      Section 7.02 hereof,  any event that would result in the  inability of the
      Trustee to make Advances.

      (b) In addition,  the Trustee shall promptly make available on its website
initially located at  www.jpmorgan.com/sfr  to each Rating Agency copies of each
Statement to


                                      143
<PAGE>

Certificateholders  described in Sections 4.03 and 3.19 (to the extent  received
by it from the Servicer)  hereof and the Servicer shall promptly furnish to each
Rating Agency copies of the following:

            (i) each annual statement as to compliance described in Section 3.20
      hereof;

            (ii) each annual  independent public  accountants'  servicing report
      described in Section 3.21 hereof; and

            (iii) each notice delivered pursuant to Section 7.01(a) hereof which
      relates to the fact that the Servicer has not made an Advance.

      Any such  notice  pursuant to this  Section  11.08 shall be in writing and
shall be deemed to have been duly  given if  personally  delivered  or mailed by
first class mail, postage prepaid, or by express delivery service to (i) Moody's
Investors  Service,  Inc., 99 Church  Street,  New York, New York 10007 and (ii)
Standard & Poor's,  a division  of The  McGraw-Hill  Companies,  Inc.,  55 Water
Street,  41st  Floor,  New  York,  NY  10041,  Attention:  Residential  Mortgage
Surveillance Group.

      SECTION 11.09. Further Assurances.

      Notwithstanding any other provision of this Agreement, neither the Regular
Certificateholders  nor the Trustee shall have any  obligation to consent to any
amendment  or  modification  of this  Agreement  unless they have been  provided
reasonable   security  or  indemnity   against  their  out-of-  pocket  expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.

      SECTION 11.10. Benefits of Agreement.

      Nothing in this  Agreement or in the  Certificates,  expressed or implied,
shall give to any  Person,  other than the  Certificateholders  and the  parties
hereto and their  successors  hereunder,  any benefit or any legal or  equitable
right, remedy or claim under this Agreement.

      SECTION 11.11 Acts of Certificateholders.

      (a) Any request, demand, authorization, direction, notice, consent, waiver
or  other  action  provided  by this  Agreement  to be  given  or  taken  by the
Certificateholders  may be embodied in and evidenced by one or more  instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing,  and such action shall become effective when
such  instrument or  instruments  are delivered to the Trustee and the Servicer.
Such instrument or instruments  (and the action  embodied  therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing  such  instrument  or  instruments.  Proof  of  execution  of  any  such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this  Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section 11.11.

      (b)  The  fact  and  date  of the  execution  by any  Person  of any  such
instrument  or  writing  may be proved  by the  affidavit  of a witness  of such
execution or by the certificate of a notary


                                      144
<PAGE>

public or other  officer  authorized  by law to take  acknowledgments  of deeds,
certifying that the individual  signing such instrument or writing  acknowledged
to him the execution thereof. Whenever such execution is by a signer acting in a
capacity  other  than  his or  her  individual  capacity,  such  certificate  or
affidavit shall also constitute sufficient proof of his authority.

      (c) Any request, demand, authorization, direction, notice, consent, waiver
or other action by any Certificateholder  shall bind every future Holder of such
Certificate and the Holder of every Certificate  issued upon the registration of
transfer  thereof or in  exchange  therefor  or in lieu  thereof,  in respect of
anything  done,  omitted or  suffered  to be done by the Trustee or the Trust in
reliance  thereon,  whether  or not  notation  of such  action is made upon such
Certificate.





                                      145
<PAGE>


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

                                    FINANCIAL ASSET SECURITIES CORP.,
                                    as Depositor


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



                                    CENTEX HOME EQUITY COMPANY, LLC,
                                    as Servicer


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



                                    JPMORGAN CHASE BANK, as Trustee


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




<PAGE>


STATE OF                            )
                                    ) ss.:
COUNTY OF                           )

      On the ____ day of July 2004,  before me, a notary  public in and for said
State, personally appeared _______________ known to me to be a ______________ of
Financial  Asset  Securities  Corp.,  a Delaware  corporation  that executed the
within  instrument,  and also known to me to be the person  who  executed  it on
behalf  of  said  corporation,  and  acknowledged  to me that  such  corporation
executed the within instrument.

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


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




<PAGE>


STATE OF                            )
                                    ) ss.:
COUNTY OF                           )

      On the ____ day of July 2004,  before me, a notary  public in and for said
State,  personally appeared  _______________ known to me to be a _______________
of Centex Home Equity  Company,  LLC, a  corporation  that  executed  the within
instrument,  and also known to me to be the person who  executed it on behalf of
said  corporation,  and  acknowledged to me that such  corporation  executed the
within instrument.

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


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



<PAGE>


STATE OF                            )
                                    ) ss.:
COUNTY OF                           )

      On the ___ day of July  2004  before  me, a notary  public in and for said
State,   personally   appeared   __________________,   known  to  me  to  be  an
_____________________  of JPMorgan  Chase Bank, 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 said  association,  and  acknowledged  to me that such
corporation executed the within instrument.

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


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




<PAGE>
                                   EXHIBIT A-1

                         FORM OF CLASS A-1 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 80,000,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 80,000,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :     162765 AA 9
Class                                           :     A-1
Assumed Maturity Date                           :     July 25, 2034




                                      A-1-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class A-1

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
A-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-1 Certificate (obtained by
dividing the Denomination of this Class A-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class A-1 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class A-1 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class A-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class A-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-1-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                                  CHEC LOAN TRUST 2004-1

                                  By: JPMORGAN CHASE BANK, not in its individual
                                      capacity, but solely as Trustee

                                      By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee



                                      A-1-3

<PAGE>



                       [Reverse of Class A-1 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                      A-1-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-1-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                      A-1-6

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.




                                      A-1-7

<PAGE>



                                   EXHIBIT A-2

                         FORM OF CLASS A-2 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 140,000,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 140,000,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :     162765 AB 7
Class                                           :     A-2
Assumed Maturity Date                           :     July 25, 2034




                                      A-2-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class A-2

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
A-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-2 Certificate (obtained by
dividing the Denomination of this Class A-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class A-2 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class A-2 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class A-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class A-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-2-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                                     CHEC LOAN TRUST 2004-1

                                By:  JPMORGAN CHASE BANK, not in its individual
                                     capacity, but solely as Trustee

                                     By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee



                                      A-2-3

<PAGE>



                       [Reverse of Class A-2 Certificate]

                             CHEC LOAN TRUST 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                      A-2-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                                       A-2-5

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor





                                      A-2-6

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.


                                      A-2-7

<PAGE>



                                   EXHIBIT A-3

                         FORM OF CLASS A-3 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 32,157,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 32,157,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :     162765 AC 5
Class                                           :     A-3
Assumed Maturity Date                           :     July 25, 2034




                                      A-3-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class A-3

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
A-3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-3 Certificate (obtained by
dividing the Denomination of this Class A-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class A-3 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class A-3 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class A-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class A-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-3-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee



                                      A-3-3

<PAGE>



                       [Reverse of Class A-3 Certificate]

                             CHEC LOAN TRUST 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                      A-3-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-3-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                      A-3-6

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.


                                      A-3-7

<PAGE>



                                   EXHIBIT A-4

                         FORM OF CLASS M-1 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").



Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 9,746,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 9,746,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :      Variable
CUSIP                                           :     162765 AD 3
Class                                           :     M-1
Assumed Maturity Date                           :     July 25, 2034






                                      A-4-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-1

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-1 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-1 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-4-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee






                                      A-4-3

<PAGE>



                       [Reverse of Class M-1 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                      A-4-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-4-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor



                                      A-4-6

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.


                                      A-4-7

<PAGE>



                                   EXHIBIT A-5

                         FORM OF CLASS M-2 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE CLASS M-1
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").



Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 8,818,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 8,818,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :
Class                                           :     M-2
Assumed Maturity Date                           :     July 25, 2034




                                      A-5-1

<PAGE>




                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-2

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-2 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-2 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-5-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee





                                      A-5-3

<PAGE>



                       [Reverse of Class M-2 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.


                                      A-5-4

<PAGE>




         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                                       A-5-5

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                      A-5-6

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.

                                      A-5-7

<PAGE>



                                   EXHIBIT A-6

                         FORM OF CLASS M-3 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                :    1
Cut-off Date                                   :    July 1, 2004
First Distribution Date                        :    August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")           :    $ 5,569,000.00
Original Class Certificate
Principal Balance of this Class                :    $ 5,569,000.00
Percentage Interest                            :    100.00%
Pass-Through Rate                              :    Variable
CUSIP                                          :    162765 AF 8
Class                                          :    M-3
Assumed Maturity Date                          :    July 25, 2034



                                      A-6-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-3

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-3 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-3 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-6-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee


                                      A-6-3

<PAGE>



                       [Reverse of Class M-3 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                      A-6-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-6-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor



                                      A-6-6

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.



                                      A-6-7

<PAGE>



                                   EXHIBIT A-7

                         FORM OF CLASS M-4 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 4,796,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 4,796,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :      162765 AG 6
Class                                           :     M-4
Assumed Maturity Date                           :     July 25, 2034



                                      A-7-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-4

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-4 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-4 Certificate (obtained by
dividing the Denomination of this Class M-4 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-4 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-4 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-4 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-7-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee

                                      A-7-3

<PAGE>



                       [Reverse of Class M-4 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                      A-7-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.


         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-7-5

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                      A-7-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.




                                      A-7-7

<PAGE>



                                   EXHIBIT A-8

                         FORM OF CLASS M-5 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES AND THE
CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 4,486.000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 4,486,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :     162765 AH 4
Class                                           :     M-5
Assumed Maturity Date                           :     July 25, 2034





                                      A-8-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-5

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-5 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-5
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-5 Certificate (obtained by
dividing the Denomination of this Class M-5 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-5 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-5 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-5
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-5 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-8-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee


                                      A-8-3

<PAGE>



                       [Reverse of Class M-5 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                      A-8-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.


         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-8-5

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor





                                      A-8-6

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.


                                      A-8-7

<PAGE>



                                   EXHIBIT A-9

                         FORM OF CLASS M-6 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS
M-4 CERTIFICATES AND THE CLASS M-5 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 4,486,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 4,486,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :     162765 AJ 0
Class                                           :     M-6
Assumed Maturity Date                           :     July 25, 2034






                                      A-9-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-6

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-6 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-6
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-6 Certificate (obtained by
dividing the Denomination of this Class M-6 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-6 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-6 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-6
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-6 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-9-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee

                                      A-9-3

<PAGE>



                       [Reverse of Class M-6 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                      A-9-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.


         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-9-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                      A-9-6

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.



                                      A-9-7

<PAGE>



                                  EXHIBIT A-10

                         FORM OF CLASS M-7 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS
M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES AND THE CLASS M-6 CERTIFICATES TO
THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 3,713,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 3,713,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :      162765 AK 7
Class                                           :     M-7
Assumed Maturity Date                           :     July 25, 2034



                                     A-10-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-7

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-7 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-7
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-7 Certificate (obtained by
dividing the Denomination of this Class M-7 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-7 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-7 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-7
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-7 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-10-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee

                                     A-10-3

<PAGE>



                       [Reverse of Class M-7 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-10-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.


         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-10-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor



                                     A-10-6

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.




                                     A-10-7

<PAGE>



                                  EXHIBIT A-11

                         FORM OF CLASS M-8 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS
M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES AND THE
CLASS M-7 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 3,249,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 3,249,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :     162765 AL 5
Class                                           :     M-8
Assumed Maturity Date                           :     July 25, 2034



                                     A-11-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-8

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-8 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-8
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-8 Certificate (obtained by
dividing the Denomination of this Class M-8 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-8 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-8 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-8
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-8 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-11-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee





                                     A-11-3

<PAGE>



                       [Reverse of Class M-8 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-11-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.


         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-11-5

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor





                                     A-11-6

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.




                                     A-11-7

<PAGE>



                                  EXHIBIT A-12

                         FORM OF CLASS M-9 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS
M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES, THE
CLASS M-7 CERTIFICATES AND THE CLASS M-8 CERTIFICATES TO THE EXTENT DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 3,094,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 3,094,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :      162765 AM 3
Class                                           :     M-9
Assumed Maturity Date                           :     July 25, 2034



                                     A-12-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class M-9

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-9 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-9
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-9 Certificate (obtained by
dividing the Denomination of this Class M-9 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-9 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-9 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-9
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-9 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-12-2

<PAGE>


         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee


                                     A-12-3

<PAGE>



                       [Reverse of Class M-9 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-12-4

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.


         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-12-5

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor





                                     A-12-6

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.




                                     A-12-7

<PAGE>



                                  EXHIBIT A-13

                         FORM OF CLASS B-1 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE MEZZANINE
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.



                                     A-13-1

<PAGE>




Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 3,094,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 3,094,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :      162765 AN 1
Class                                           :     B-1
Assumed Maturity Date                           :     July 25, 2034



                                     A-13-2

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class B-1

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
B-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class B-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class B-1 Certificate (obtained by
dividing the Denomination of this Class B-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class B-1 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class B-1 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class B-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.


                                     A-13-3

<PAGE>



         This Class B-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-13-4

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                                 CHEC LOAN TRUST 2004-1

                                 By:  JPMORGAN CHASE BANK, not in its individual
                                      capacity, but solely as Trustee

                                 By_______________________________________

This is one of the Certificates
referenced in the within-mentioned Agreement

By____________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee





                                     A-13-5

<PAGE>



                       [Reverse of Class B-1 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-13-6

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10%of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-13-7

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                     A-13-8

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.




                                     A-13-9

<PAGE>



                                  EXHIBIT A-14

                         Form of Class B-2 Certificates

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE MEZZANINE
CERTIFICATES AND THE CLASS B-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.



                                     A-14-1

<PAGE>




Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $ 3,094,000.00
Original Class Certificate
Principal Balance of this Class                 :     $ 3,094,000.00
Percentage Interest                             :     100.00%
Pass-Through Rate                               :     Variable
CUSIP                                           :     162765 AP 6
Class                                           :     B-2
Assumed Maturity Date                           :     July 25, 2034



                                     A-14-2

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class B-2

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
B-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class B-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class B-2 Certificate (obtained by
dividing the Denomination of this Class B-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, Centex Home Equity Company, LLC, as servicer (the "Servicer"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class B-2 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class B-2 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class B-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.


                                     A-14-3

<PAGE>



         This Class B-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-14-4

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee





                                     A-14-5

<PAGE>



                       [Reverse of Class B-2 Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-14-6

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10%of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-14-7

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor





                                     A-14-8

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.





                                     A-14-9

<PAGE>



                                  EXHIBIT A-15

                          FORM OF CLASS C CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE MEZZANINE
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance                 $
of this Certificate ("Denomination")            :
Original Class Certificate
Principal Balance of this Class                 :     $
Percentage Interest                             :     100%
Pass-Through Rate                               :     Variable
Class                                           :     C





                                     A-15-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                     Class C

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Greenwich Capital Financial Products, Inc., is the
registered owner of the Percentage Interest evidenced by this Class C
Certificate (obtained by dividing the Denomination of this Class C Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of July 1, 2004 (the
"Agreement") among the Depositor, Centex Home Equity Company, LLC, as servicer
(the "Servicer"), and JPMorgan Chase Bank, a New York banking corporation, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Class C
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.


                                     A-15-2

<PAGE>



         This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-15-3

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee



                                     A-15-4

<PAGE>



                        [Reverse of Class C Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-15-5

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-15-6

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                     A-15-7

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.



                                     A-15-8

<PAGE>



                                  EXHIBIT A-16

                           FORM OF CLASS P CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $100.00
Original Class Certificate
Principal Balance of this Class                 :     $100.00
Percentage Interest                             :     100.00%
Class                                           :     P






                                     A-16-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                     Class P

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable rate and
         fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Greenwich Capital Financial Products, Inc. is the
registered owner of the Percentage Interest evidenced by this Class P
Certificate (obtained by dividing the Denomination of this Class P Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of July 1, 2004 (the
"Agreement") among the Depositor, Centex Home Equity Company, LLC, as servicer
(the "Servicer"), and JPMorgan Chase Bank, a New York banking corporation, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Class P
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class P
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.


                                     A-16-2

<PAGE>



         Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-16-3

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee


                                     A-16-4

<PAGE>



                        [Reverse of Class P Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-16-5

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-16-6

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                     A-16-7

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.


                                     A-16-8

<PAGE>



                                  EXHIBIT A-17

                          FORM OF CLASS R CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Percentage Interest                             :     100.00%
Class                                           :     R









                                     A-17-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                     Class R

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting primarily of a pool of first lien and second lien
         adjustable rate and fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.

         This certifies that Greenwich Capital Markets, Inc. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of July 1, 2004
(the "Agreement") among the Depositor, Centex Home Equity Company, LLC, as
servicer (the "Servicer"), and JPMorgan Chase Bank, a New York banking
corporation, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

         This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in Minneapolis, Minnesota.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.



                                     A-17-2

<PAGE>



         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.




                                     A-17-3

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee



                                     A-17-4

<PAGE>



                        [Reverse of Class R Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-17-5

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10%of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-17-6

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                     A-17-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.



                                     A-17-8

<PAGE>



                                  EXHIBIT A-18

                         FORM OF Class R-X CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS Class R-X CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Percentage Interest                             :     100.00%
Class                                           :     R



                                     A-18-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                                    Class R-X

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting primarily of a pool of first lien and second lien
         adjustable rate and fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.

         This certifies that Greenwich Capital Markets, Inc. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of July 1, 2004
(the "Agreement") among the Depositor, Centex Home Equity Company, LLC, as
servicer (the "Servicer"), and JPMorgan Chase Bank, a New York banking
corporation, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

         This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in Minneapolis, Minnesota.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.



                                     A-18-2

<PAGE>



         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R-X
Certificate in violation of the restrictions mentioned above.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.




                                     A-18-3

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee



                                     A-18-4

<PAGE>



                       [Reverse of Class R-X Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-18-5

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10%of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-18-6

<PAGE>




                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor





                                     A-18-7

<PAGE>


                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.


                                     A-18-8

<PAGE>



                                  EXHIBIT A-19

               FORM OF CLASS R-[1][2][3][4] INTEREST CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CLASS R-[1][2][3][4] INTEREST CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES
NOT BEAR INTEREST AND WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED
HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.                                 :     1
Cut-off Date                                    :     July 1, 2004
First Distribution Date                         :     August 25, 2004
Percentage Interest                             :     100.00%
Class                                           :     R-[1][2][3][4] Interest









                                     A-19-1

<PAGE>



                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1
                          Class R-[1][2][3][4] Interest

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting primarily of a pool of first lien and second lien
         adjustable rate and fixed rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.

         This certifies that Greenwich Capital Markets, Inc. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of July 1, 2004
(the "Agreement") among the Depositor, Centex Home Equity Company, LLC, as
servicer (the "Servicer"), and JPMorgan Chase Bank, a New York banking
corporation, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

         This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in Minneapolis, Minnesota.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.



                                     A-19-2

<PAGE>



         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class
R-[1][2][3][4] Interest Certificate in violation of the restrictions mentioned
above.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.




                                     A-19-3

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: July ___, 2004

                              CHEC LOAN TRUST 2004-1

                              By:   JPMORGAN CHASE BANK, not in its individual
                                    capacity, but solely as Trustee

                                    By_________________________________


This is one of the Certificates
referenced in the within-mentioned Agreement

By__________________________________________
         Authorized Signatory of
         JPMORGAN CHASE BANK,
         as Trustee



                                     A-19-4

<PAGE>



             [Reverse of Class R-[1][2][3][4] Interest Certificate]

                             CHEC Loan Trust 2004-1
                           Asset-Backed Certificates,
                                  Series 2004-1

         This Certificate is one of a duly authorized issue of Certificates
designated as CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates


                                     A-19-5

<PAGE>



of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Stated Principal Balance of the Mortgage Loans is less than 10%of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
the Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [August] 2034.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-19-6

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ____________________________________________________
______________________________________________________________________________

Dated:_________________

                                  ________________________________________
                                   Signature by or on behalf of assignor




                                     A-19-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
account number  __________________________________, or, if mailed by check, to
_______________________________________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.

         This information is provided by  _______________________, the assignee
named above, or _________________________________________________, as its agent.


                                     A-19-8

<PAGE>



                                    EXHIBIT B

                                    RESERVED


                                       B-1

<PAGE>



                                    EXHIBIT C

                  FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT







                                       C-1

<PAGE>



                                    EXHIBIT D

                             MORTGAGE LOAN SCHEDULE

                                 Filed By Paper.












                                       D-1

<PAGE>



                                    EXHIBIT E

                        REQUEST FOR RELEASE OF DOCUMENTS


To:      JPMorgan Chase Bank
         4 New York Plaza, 6th Floor
         New York, NY 10004
         Attention: Institutional Trust Services/Global Debt

          Re:  Pooling and Servicing Agreement dated as of July 1, 2004 among
               Financial Asset Securities Corp., as Depositor, Centex Home
               Equity Company, LLC, as Servicer And JPMorgan Chase Bank, as
               Trustee

         In connection with the administration of the Mortgage Loans held by you
as Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or the Mortgage Loan described below, for the reason indicated.

MORTGAGE LOAN NUMBER:

MORTGAGOR NAME, ADDRESS & ZIP CODE:

REASON FOR REQUESTING DOCUMENTS (CHECK ONE):

_________1.       Mortgage Paid in Full

_________2.       Foreclosure

_________3.       Substitution

_________4. Other Liquidation (Repurchases, etc.)

_________5.       Nonliquidation            Reason:_____________________

Address to which Trustee should deliver the Trustee's Mortgage File:






                                       E-1

<PAGE>



                                By:
                                     -------------------------------------
                                         (authorized signer)

                                Issuer:
                                     -------------------------------------

                                Address:
                                         ---------------------------------

                                Date:
                                     -------------------------------------

TRUSTEE

JPMorgan Chase Bank

         Please acknowledge the execution of the above request by your signature
and date below:

         ____________________________                         __________________
         Signature                                            Date

         Documents returned to Trustee:

         ______________________________                       __________________
         Trustee                                              Date



                                       E-2

<PAGE>



                                   EXHIBIT F-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                              [  DATE  ]



Financial Asset Securities Corp.             Centex Home Equity Company, LLC
600 Steamboat Road                           2828 N. Harwood Street, 11th Floor
Greenwich, Connecticut 06830                 Dallas, Texas 75201

          Re:  Pooling and Servicing Agreement, dated as of July 1, 2004, among
               Financial Asset Securities Corp., Centex Home Equity Company, LLC
               and JPMorgan Chase Bank, Asset-Backed Certificates, Series 2004-1

Ladies and Gentlemen:

         Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.

         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 the exception report annexed hereto), (i) all documents required to be
delivered to it pursuant Section 2.01 (other than Section 2.01(vi)) of this
Agreement and if actually delivered to it, the documents required to be
delivered to it pursuant to Section 2.01(vi) of this Agreement are in its
possession, (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan and (iii) based on its examination
of the foregoing documents, the information set forth in the Mortgage Loan
Schedule that corresponds to items (1), (3), (10), (11), (12), (18), (24) and
(25, but only as to Gross Margin, Maximum Mortgage Rate and Periodic Rate Cap)
of the Mortgage Loan Schedule 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, recordability, enforceability or
genuineness of any of the documents contained in the Mortgage File pertaining to
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File includes any of the documents specified
in clause (vi) of Section 2.01 of the Pooling and Servicing Agreement.




                                      F-1-1

<PAGE>



                                      JPMORGAN CHASE BANK


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



                                      F-1-2

<PAGE>



                                   EXHIBIT F-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                       ________________
                                                               [Date]

Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

          Re:  Pooling and Servicing Agreement (the "Pooling and Servicing
               Agreement"), dated as of July 1, 2004 among Financial Asset
               Securities Corp., as Depositor, Centex Home Equity Company, LLC,
               as Servicer and JPMorgan Chase Bank, as Trustee with respect to
               CHEC Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1

Ladies and Gentlemen:

         In accordance with Section 2.02 of the Pooling and Servicing Agreement,
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 Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.

         The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in item 1 of the definition of
Mortgage Loan Schedule in the Pooling and Servicing Agreement accurately
reflects information in the Mortgage File.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.

                                      JPMORGAN CHASE BANK, as Trustee


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



                                      F-2-1

<PAGE>



                                   EXHIBIT F-3

                        FORM OF RECEIPT OF MORTGAGE NOTE


Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

         Re:      CHEC Loan Trust 2004-1,
                  Asset-Backed Certificates Series 2004-1

Ladies and Gentlemen:

                  J.P. Morgan Trust Company, National Association, in its
capacity as custodian (the "Custodian") under the Pooling and Servicing
Agreement dated as of July 1, 2004, among Financial Asset Securities Corp. as
Depositor, Centex Home Equity Company, LLC, as Servicer and JPMorgan Chase Bank,
as Trustee, hereby acknowledges receipt (subject to review as required by
Section 2.01 of the Pooling and Servicing Agreement) of the items delivered to
it with respect to the Mortgage Loans pursuant to Section 2.01 of the Pooling
and Servicing Agreement.

                  The Schedule of Mortgage Loans is attached to this receipt as
Schedule I.

                  The Custodian hereby additionally acknowledges that it shall
review such items as required by Section 2.01 of the Pooling and Servicing
Agreement.



                                      J.P. MORGAN TRUST COMPANY,
                                      NATIONAL ASSOCIATION, as
                                      Custodian


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



                                      F-3-1

<PAGE>



                                    EXHIBIT G

                    FORM OF ANNUAL STATEMENT AS TO COMPLIANCE

                             CHEC Loan Trust 2004-1
                    Asset-Backed Certificates, Series 2004-1

                  I, _____________________, hereby certify that I am a duly
appointed __________________________ of Centex Home Equity Company, LLC (the
"Servicer"), and further certify as follows:

                  1. This certification is being made pursuant to the terms of
the Pooling and Servicing Agreement, dated as of July 1, 2004, (the
"Agreement"), among Financial Asset Securities Corp., as depositor, Centex Home
Equity Company, LLC, as servicer and JPMorgan Chase Bank, as trustee.

                  2. I have reviewed the activities of the Servicer during the
preceding year and the Servicer's performance under the Agreement and to the
best of my knowledge, based on such review, the Servicer has fulfilled all of
its obligations under the Agreement throughout the year.

                  Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreement.


Dated: _____________




                                       G-1

<PAGE>



                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.





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

                  I, _________________________, a (an) __________________ of the
Servicer, hereby certify that _________________ is a duly elected, qualified,
and acting _______________________ of the Servicer and that the signature
appearing above is his/her genuine signature.


                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.



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







                                       G-2

<PAGE>



                                    EXHIBIT H

                           FORM OF LOST NOTE AFFIDAVIT

         Personally appeared before me the undersigned authority to administer
oaths, __________________ who first being duly sworn deposes and says: Deponent
is ________________ of ________________, successor by merger to
_________________________ ("Seller") and who has personal knowledge of the facts
set out in this affidavit.

On _________________________________, ___________________________ did execute
and deliver a promissory note in the principal amount of $____________________.

         That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.

         Seller executes this Affidavit for the purpose of inducing JPMorgan
Chase Bank, as trustee on behalf of CHEC Loan Trust 2004-1, Asset-Backed
Certificates Series 2004-1, to accept the transfer of the above described loan
from Seller.

         Seller agrees to indemnify JPMorgan Chase Bank, Financial Asset
Securities Corp. and Centex Home Equity Company, LLC. harmless for any losses
incurred by such parties resulting from the above described promissory note has
been lost or misplaced.

By:      _______________________
         _______________________

STATE OF                                    )
                                            )   SS:
COUNTY OF                                   )

         On this ______ day of ______________, 20_, before me, a Notary Public,
in and for said County and State, appeared , who acknowledged the extension of
the foregoing and who, having been duly sworn, states that any representations
therein contained are true.

         Witness my hand and Notarial Seal this _________ day of 20__.

____________________________
____________________________
My commission expires __________________________.



                                       H-1

<PAGE>



                                    EXHIBIT I

                            LIMITED POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, a
New York banking corporation, having a place of business at 4 New York Plaza,
6th Floor, New York, N.Y. 10004, as Trustee (and in no personal or other
representative capacity), under the Pooling and Servicing Agreement, dated July
1, 2004, among Financial Asset Securities Corp., as depositor, Centex Home
Equity Company, LLC, as servicer and JPMorgan Chase Bank, as trustee (as
amended, restated, supplemented or otherwise modified from time to time, the
"Agreement"; capitalized terms not defined herein have the definitions assigned
to such terms in the Agreement), relating to CHEC Loan Trust 2004-1, hereby
appoints Centex Home Equity Company, LLC, in its capacity as the Servicer under
the Agreement as the Trustee's true and lawful Special Attorney-in-Fact, in the
Trustee's name, place and stead and for the Trustee's benefit, but only in its
capacity as Trustee aforesaid, to perform all acts and execute all documents as
may be customary, necessary and appropriate to effectuate the following
enumerated transactions in respect of any mortgage, deed of trust, promissory
note or real estate owned from time to time owned (beneficially or in title,
whether the Trustee is named therein as mortgagee or beneficiary or has become
mortgagee or beneficiary by virtue of endorsement, assignment or other
conveyance) or held by or registered to the Trustee (directly or through
custodians or nominees), or in respect of which the Trustee has a security
interest or other lien, all as provided under the Agreement and only to the
extent the respective Trustee has an interest therein under the Agreement, and
in respect of which the Servicer is acting as servicer pursuant to the Agreement
(collectively with respect to each PSA, the "Mortgage Documents").

                  This appointment shall apply to the following enumerated
transactions under the Agreement only:

                  1. The modification or re-recording of any Mortgage Document
for the purpose of correcting it to conform to the original intent of the
parties thereto or to correct title errors discovered after title insurance was
issued and where such modification or re-recording does not adversely affect the
lien under the Mortgage Document as insured.

                  2. The subordination of the lien under a Mortgage Document to
an easement in favor of a public utility company or a state or federal agency or
unit with powers of eminent domain including, without limitation, the execution
of partial satisfactions/releases, partial reconveyances and the execution of
requests to trustees to accomplish same.

                  3. The conveyance of the properties subject to a Mortgage
Document to the applicable mortgage insurer, or the closing of the title to the
property to be acquired as real estate so owned, or conveyance of title to real
estate so owned.

                  4. The completion of loan assumption and modification
agreements in respect of Mortgage Documents.



                                       I-1

<PAGE>



                  5. The full or partial satisfaction/release of a Mortgage
Document or full conveyance upon payment and discharge of all sums secured
thereby, including, without limitation, cancellation of the related note.

                  6. The assignment of any Mortgage Document, in connection with
the repurchase of the mortgage loan secured and evidenced thereby.

                  7. The full assignment of a Mortgage Document upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related note.

                  8. With respect to a Mortgage Document, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of judicial or
non-judicial foreclosure or termination, cancellation or rescission of any such
foreclosure, including, without limitation, any and all of the following acts:

                           a. the substitution of trustee(s) serving under a
                  deed of trust, in accordance with state law and the deed of
                  trust;

                           b. the preparation and issuance of statements of
                  breach or non-performance;

                           c. the preparation and filing of notices of default
                  and/or notices of sale;

                           d. the cancellation/rescission of notices of default
                  and/or notices of sale;

                           e. the taking of a deed in lieu of foreclosure; and

                           f. the preparation and execution of such other
                  documents and performance of such other actions as may be
                  necessary under the terms of the Mortgage Document or state
                  law to expeditiously complete said transactions in paragraphs
                  8(a) through 8(e), above.

                  9. Demand, sue for, recover, collection and receive each and
every sum of money, debt, account and interest (which now is, or hereafter shall
become due and payable) belonging to or claimed by the Trustee under the
Mortgage Documents, and to use or take any lawful means for recovery thereof by
legal process or otherwise.

                  10. Endorse on behalf of the Trustee all checks, drafts and/or
negotiable instruments made payable to the Trustee in respect of the Mortgage
Documents.

                  The Trustee gives the Special Attorney-in-Fact full power and
authority to execute such instruments and to do and perform all and every act
and thing necessary and proper to carry into effect the power or powers granted
by this Limited Power of Attorney, subject to the terms and conditions set forth
in the Agreement including the standard of care applicable to servicers in the
Agreement, and hereby does


                                       I-2

<PAGE>



ratify and confirm to what such Special Attorney-in-Fact shall lawfully do or
cause to be done by authority hereof.


                                       I-3

<PAGE>



                  IN WITNESS WHEREOF, the Trustee has caused its corporate name
and seal to be hereto signed and affixed and these presents to be acknowledged
by its duly elected and authorized officer this ______th day of ___ _________,
2004.


                                      JPMORGAN CHASE BANK, as Trustee


                                      By:______________________
                                      Name:
                                      Title:   Senior Vice President

                                      WITNESS:


                                      By:_______________________________
                                      Name:
                                      Title:

                                      WITNESS:


                                      By:_______________________________
                                      Name:
                                      Title:


STATE OF NEW YORK
                                    SS
COUNTY OF NEW YORK

         On ______________, 2004, before me, the undersigned, a Notary Public in
and for said state, personally appeared __________________, personally known to
me to be the person whose name is subscribed to the within instrument and to be
a duly authorized and acting Senior Vice President of JPMorgan Chase Bank, and
such person acknowledged to me that such person executed the within instrument
in such person's authorized capacity as a Senior Vice President of JPMorgan
Chase Bank, and that by such signature on the within instrument the entity upon
behalf of which such person acted executed the instrument.

         WITNESS my hand and official seal.


                                           ______________________________
                                                Notary Public


                                       I-4

<PAGE>



                                    EXHIBIT J

                    FORM OF INVESTMENT LETTER [NON-RULE 144A]

                                                              [DATE]
Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, NY 10004
Attention: Institutional Trust Services/Global Debt

                  Re:      CHEC Loan Trust 2004-1,
                           Asset-Backed Certificates Series 2004-1

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) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan 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, (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 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.



                                       J-1

<PAGE>




                                       Very truly yours,

                                       [NAME OF TRANSFEREE]

                                       By:
                                          --------------------------------------
                                                 Authorized Officer





                                       J-2

<PAGE>



                       FORM OF RULE 144A INVESTMENT LETTER

                                                       [DATE]

Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, NY 10004
Attention: Institutional Trust Services/Global Debt

                  Re:      CHEC Loan Trust 2004-1,
                           Asset-Backed Certificates Series 2004-1
                           ---------------------------------------

Ladies and Gentlemen:

         In connection with our acquisition of the above 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 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, (c) we are not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or a plan 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, (d) 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, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (e) 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.



                                       J-3

<PAGE>




                                    Very truly yours,

                                    [NAME OF TRANSFEREE]

                                    By:
                                        -------------------------------------
                                              Authorized Officer


                                       J-4

<PAGE>



                                                            ANNEX 1 TO EXHIBIT J

            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:

         1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

         2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $ 1 in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A and (ii) the
Buyer satisfies the criteria in the category marked below.

         CORPORATION, ETC. The Buyer is a corporation (other than a bank,
         savings and loan association or similar institution), Massachusetts or
         similar business trust, partnership, or charitable organization
         described in Section 501(c)(3) of the Internal Revenue Code 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.

--------
1        Buyer must own and/or invest on a discretionary basis at least
         $100,000,000 in securities unless Buyer is a dealer, and, in that case,
         Buyer must own and/or invest on a discretionary basis at least
         $10,000,000 in securities.


                                       J-5

<PAGE>



         INSURANCE COMPANY. The Buyer is an insurance company whose primary and
         predominant business activity is the writing of insurance or the
         reinsuring of risks underwritten by insurance companies and which is
         subject to supervision by the insurance commissioner or a similar
         official or agency of a State, territory or the District of Columbia.

         STATE OR LOCAL PLAN. The Buyer is a plan established and maintained by
         a State, its political subdivisions, or any agency or instrumentality
         of the State or its political subdivisions, for the benefit of its
         employees.

         ERISA PLAN. The Buyer is an employee benefit plan within the meaning of
         Title I of the Employee Retirement Income Security Act of 1974.

         INVESTMENT 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.

         3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) 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.

         4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, 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.

         5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.


                                       J-6

<PAGE>



         6. 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.




                                       J-7

<PAGE>




                                      Print Name of Buyer

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

                                      Date:
                                           --------------------------------


                                       J-8

<PAGE>



                                                            ANNEX 2 TO EXHIBIT J

            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.

         2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, 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 Buyers 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).

         3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

         4. The term "SECURITIES" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) 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 agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.



                                       J-9

<PAGE>



         5. The Buyer is familiar with Rule 144A and understands 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.

         6. 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:
                                            ---------------------------------




                                      J-10

<PAGE>



                                    EXHIBIT K

                     AFFIDAVIT OF TRANSFER OF R CERTIFICATES
                           PURSUANT TO SECTION 5.02(d)

                             CHEC LOAN TRUST 2004-1
                    ASSET-BACKED CERTIFICATES, SERIES 2004-1


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 Class R Certificates (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, (the "Agreement"), relating to the
above-referenced Certificates, among Financial Asset Securities Corp., as
Depositor, Centex Home Equity Company, LLC, as Servicer (the "Servicer") and
JPMorgan Chase Bank, as Trustee (the "Trustee"). Capitalized terms used, but not
defined herein 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, as of the date hereof and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.

         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) to 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


                                       K-1

<PAGE>



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).

         5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement 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(d) 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 K 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
Certificate.

         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 Certificate may be a "noneconomic
residual interest" 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.

         11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.




                                       K-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 __________, ___.

                                      [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 _______, ___.


                                         --------------------------------------
                                                 NOTARY PUBLIC

                               My Commission expires the ____ day of ____, ___.




                                       K-3

<PAGE>



                                    EXHIBIT L

                         FORM OF TRANSFEROR CERTIFICATE

                                                              [DATE]

Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, NY 10004
Attention: Institutional Trust Services/Global Debt

                  Re:      CHEC Loan Trust 2004-1,
                           Asset-Backed Certificates Series 2004-1

Ladies and Gentlemen:

         In connection with our disposition of the above 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, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.

                                      Very truly yours,

                                      TRANSFEROR

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



                                       L-1

<PAGE>



                                    EXHIBIT M

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                 _____________, 20__


Centex Home Equity Company, LLC           JPMorgan Chase Bank
2828 North Harwood Street                 4 New York Plaza, 6th Floor
Dallas, Texas 75201                       New York, New York 10004
                                          Attention: Institutional Trust
                                          Services/Global Debt
Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

                  Re:      CHEC Loan Trust 2004-1,
                           Asset-Backed Certificates Series 2004-1

Dear Sirs:

                  _____________ (the "Transferee") intends to acquire from the
_______________________ ( "Transferor") $_________ Initial Certificate Principal
Balance CHEC Loan Trust 2004-1, Asset-Backed Certificates Series 2004-1, Class
[C][P][R][R-X] (the "Certificates"), issued pursuant to a Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") dated as of July 1, 2004 among
Financial Asset Securities Corp. as depositor (the "Depositor"), Centex Home
Equity Company, LLC as Servicer (the "Servicer") and JPMorgan Chase Bank as
trustee (the "Trustee"). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned thereto in the Pooling and Servicing Agreement.
The Transferee hereby certifies, represents and warrants to, and covenants with
the Depositor, the Trustee and the Servicer the following:

                  The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 C.F.R.ss.
2510.3-101.

                                    Very truly yours,

                                    [Transferee]

                                    By:_____________________________
                                    Name:
                                    Title:


                                       M-1

<PAGE>



                                   EXHIBIT N-1

        FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

                  I, [_____], certify that:

                  l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of CHEC
Loan Trust 2004-1, Asset-Backed Certificates, Series 2004-1;

                  2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;

                  3. Based on my knowledge, the distribution or servicing
information required to be provided to the trustee by the servicer under the
pooling and servicing, or similar, agreement, for inclusion in these reports is
included in these reports;

                  4. Based on my knowledge and upon the annual compliance
statement included in the report and required to be delivered to the trustee in
accordance with the terms of the pooling and servicing, or similar, agreement,
and except as disclosed in the reports, the servicer has fulfilled its
obligations under the servicing agreement; and

                  5. The reports disclose all significant deficiencies relating
to the servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar procedure, as set forth in the pooling and servicing, or similar,
agreement, that is included in these reports.

                  In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: Centex Home
Equity Company, LLC and JPMorgan Chase Bank.

Date:_________

                                      FINANCIAL ASSET SECURITIES CORP.


                                      By:____________________________________
                                      Name:
                                      Title:



<PAGE>



                                   EXHIBIT N-2

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE TRUSTEE

          Re:  CHEC Loan Trust 2004-1 (the "Trust") Mortgage Pass-Through
               Certificates, Series 2004-1

                  I, [identify the certifying individual], a [title] of JPMorgan
Chase Bank, as Trustee of the Trust, hereby certify to Financial Asset
Securities Corp. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:

                  1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;

                  2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and

                  3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these reports.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated July 1,
2004 (the "Pooling and Servicing Agreement"), among the Depositor as depositor,
Centex Home Equity Company, LLC, as servicer and JPMorgan Chase Bank as trustee.

                                      JPMORGAN CHASE BANK, as Trustee


                                      By:__________________________________
                                      Name:
                                      Title:
                                      Date:





<PAGE>



                                   EXHIBIT N-3

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE SERVICER

                  Re:  CHEC Loan Trust 2004-1 (the "Trust"), Mortgage
                       Pass-Through Certificates, Series 2004-1

                  I, [identify the certifying individual], certify that:


                  l. I have reviewed the information required to be provided to
the Trustee by the Servicer pursuant to the Pooling and Servicing Agreement (the
"Servicing Information");

                  2. Based on my knowledge, the Servicing Information, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;

                  3. Based on my knowledge, the Servicing Information required
to be provided to the Trustee by the Servicer has been provided as required
under the Pooling and Servicing Agreement;

                  4. I am responsible for reviewing the activities performed by
the Servicer under the Pooling and Servicing Agreement and based upon my
knowledge and the annual compliance review required under the Pooling and
Servicing Agreement, and except as disclosed by written notice to the Trustee or
in the annual compliance statement or certified public accountant's report
required to be delivered to the Trustee in accordance with the terms of the
Pooling and Servicing Agreement (which has been so delivered to the Trustee),
the Servicer has, for the period covered by the Form 10-K Annual Report,
fulfilled its obligations under the Pooling and Servicing Agreement; and

                  5. The Servicer has disclosed to its certified public
accountants and the Depositor all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Pooling and Servicing
Agreement.


                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated July 1,
2004 (the "Pooling and Servicing Agreement"), among the Depositor as depositor,
Centex Home Equity Company, LLC as servicer and JPMorgan Chase Bank as trustee.





<PAGE>



                                      CENTEX HOME EQUITY COMPANY, LLC


                                      By:____________________________
                                      Name:
                                      Title:
                                      Date:




<PAGE>



                                    EXHIBIT O

                              FORM OF CAP CONTRACT

                            [Available Upon Request]










<PAGE>


                                   SCHEDULE I

                           PREPAYMENT CHARGE SCHEDULE


                            (Available Upon Request)