<PAGE>
                                                                   EXHIBIT 10.25


                      Morgan Stanley Mortgage Capital Inc.

                                       and


                  Morgan Stanley Dean Witter Credit Corporation

                                   ----------

                 AMENDED AND RESTATED MASTER SERVICING AGREEMENT

                          Dated as of February 1, 2004



            Fixed, Adjustable Rate, and Pledged Asset Mortgage Loans
                         Servicer Flow Delivery Program



<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
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                                    ARTICLE I

                                   DEFINITIONS

Section 1.01        Defined Terms.................................................................................1

                                   ARTICLE II

                               BOOKS AND RECORDS;
                           TRANSFER OF MORTGAGE LOANS

Section 2.01        Books and Records............................................................................12
Section 2.02        Transfer of Mortgage Loans...................................................................12

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF Servicer

Section 3.01        Representations and Warranties of Servicer...................................................13


                                   ARTICLE IV

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 4.01        Servicer to Act as Servicer..................................................................14
Section 4.02        Collection of Mortgage Loan Payments.........................................................15
Section 4.03        Realization Upon Defaulted Mortgage Loans....................................................15
Section 4.04        Establishment of Custodial Accounts; Deposits in Custodial Accounts..........................16
Section 4.05        Permitted Withdrawals From the Custodial Account.............................................17
Section 4.06        Establishment of Escrow Accounts; Deposits in Escrow Accounts................................18
Section 4.07        Permitted Withdrawals From Escrow Account....................................................18
Section 4.08        Payment of Taxes, Insurance and Other Charges; Maintenance of Primary Insurance
                      Policies; Collections Thereunder...........................................................19
Section 4.09        Transfer of Accounts.........................................................................20
Section 4.10        Maintenance of Property Insurance............................................................20
Section 4.11        Maintenance of Mortgage Impairment Insurance Policy..........................................21
Section 4.12        Errors and Omissions Insurance...............................................................21
Section 4.13        Title, Management and Disposition of REO Property............................................22
Section 4.14        Adjustments to Mortgage Interest Rates.......................................................22
Section 4.15        Subservicing Agreements Between Servicer and Subservicers....................................23
Section 4.16        Successor Subservicers.......................................................................23
</Table>

                                       -i-
<PAGE>

<Table>
<Caption>
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                                                                                                               ----
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Section 4.17        Liability of Servicer........................................................................23
Section 4.18        Assumption or Termination of Subservicing Agreements.........................................24
Section 4.19        Servicing Accounts...........................................................................24
Section 4.20        Permitted Investments........................................................................24

                                    ARTICLE V

                ADMINISTRATION AND SERVICING OF TRADING ACCOUNTS

Section 5.01        Servicer to Service Trading Accounts.........................................................25
Section 5.02        Agreements with Respect to the Surety Bond...................................................25

                                   ARTICLE VI

                                PAYMENTS TO OWNER

Section 6.01        Distributions................................................................................26
Section 6.02        Statements to Owner..........................................................................26
Section 6.03        Monthly Advances by Servicer.................................................................27
Section 6.04        Compensating Interest........................................................................27

                                   ARTICLE VII

                           GENERAL SERVICING PROCEDURE

Section 7.01        Assumption Agreements........................................................................28
Section 7.02        Satisfaction of Mortgages and Release of Mortgage Files......................................28
Section 7.03        Servicing Compensation.......................................................................28
Section 7.04        Annual Statement as to Compliance............................................................29
Section 7.05        Annual Independent Certified Public Accountants' Servicing Report............................29
Section 7.06        Owner's Right to Examine Servicer Records....................................................29
Section 7.07        Annual Certification.........................................................................30

                                  ARTICLE VIII

                        REPORTS TO BE PREPARED BY COMPANY

Section 8.01        Servicer Shall Provide Information as Reasonably Required....................................31

                                   ARTICLE IX

                                    SERVICER

Section 9.01        Indemnification; Third Party Claims..........................................................31
Section 9.02        Merger or Consolidation of Servicer..........................................................31
Section 9.03        Limitation on Liability of Servicer and Others...............................................32
</Table>

                                      -ii-
<PAGE>

<Table>
<Caption>
                                                                                                               Page
                                                                                                               ----
<S>                 <C>                                                                                        <C>
Section 9.04        Servicer Not to Resign.......................................................................32
Section 9.05        No Transfer of Servicing.....................................................................32

                                    ARTICLE X

                                     DEFAULT

Section 10.01       Events of Default............................................................................33
Section 10.02       Waiver of Defaults...........................................................................34

                                   ARTICLE XI

                                   TERMINATION

Section 11.01       Termination..................................................................................34

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

Section 12.01       Successor to Servicer........................................................................35
Section 12.02       Amendment....................................................................................36
Section 12.03       Assignments..................................................................................36
Section 12.04       Assignment of Servicing Rights...............................................................36
Section 12.05       Governing Law................................................................................36
Section 12.06       Assignment by Owner..........................................................................36
Section 12.07       Notices......................................................................................37
Section 12.08       Severability Provisions......................................................................37
Section 12.09       Exhibits.....................................................................................37
Section 12.10       General Interpretive Principles..............................................................37
Section 12.11       Reproduction of Documents....................................................................38
Section 12.12       Successors and Assigns.......................................................................38
Section 12.13       Counterparts.................................................................................38
Section 12.14       Non-Solicitation.............................................................................38
</Table>

EXHIBIT A           Form of Limited Power of Attorney

EXHIBIT B           Annual Certification

EXHIBIT C           Data File

                                      -iii-
<PAGE>

                  This is a AMENDED AND RESTATED MASTER SERVICING AGREEMENT
(this "Agreement"), dated and effective as of February 1, 2004 and is by and
between Morgan Stanley Mortgage Capital Inc., a New York corporation, as owner
("Owner"), and Morgan Stanley Dean Witter Credit Corporation, a Delaware
corporation, as servicer ("Seller").

                             PRELIMINARY STATEMENTS

                  Pursuant to an Amended and Restated Master Mortgage Loan
Purchase Agreement, dated as of March 1, 2000 between Owner and Servicer (as
amended, modified, restated or supplemented from time to time, the "Purchase
Agreement"), Owner may purchase from Servicer from time to time certain
residential, first mortgage loans. In order to facilitate the servicing of such
mortgage loans by Servicer, Servicer and the Owner are parties to that certain
Master Servicing Agreement, dated as of February 1, 1999 (the "Original
Servicing Agreement"), pursuant to which Servicer services and administers each
Mortgage Loan for Owner, its successors and assigns from and after the
respective Closing Date. At the present time, Owner and Servicer desire to amend
and restate the Original Servicing Agreement to make certain modifications as
set forth herein

                  In consideration of the premises and the mutual agreements
hereinafter set forth, Owner and Servicer agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  Section 1.01 Defined Terms.

                  Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires shall have the following meaning
specified in this Section (capitalized terms used and not otherwise defined
herein shall have the respective meanings specified in the Purchase Agreement to
the extent the same are defined therein):

                  "Additional Collateral": With respect to any Additional
Collateral Mortgage Loan, the securities and other assets held in a Trading
Account subject to a security interest securing such Additional Collateral
Mortgage Loan.

                  "Additional Collateral Mortgage Loan": A Mortgage Loan secured
by Additional Collateral in the form of a security interest in the securities
and other assets held in a Trading Account and that is identified by Servicer as
an Additional Collateral Mortgage Loan as to which the Additional Collateral is
still required to be provided.

                  "Additional Collateral Pledge Agreement": With respect to each
Additional Collateral Mortgage Loan, any pledge and security agreement and
account control agreement in favor of Servicer granting a security interest and
other rights in a securities account to secure the related Mortgage Loan.

<PAGE>

                  "Agreement": This Amended and Restated Master Servicing
Agreement and all exhibits hereto, amendments hereof and supplements hereto, as
the same may be from time to time, amended modified, related or supplemented.

                  "Adjustable Rate Mortgage Loan": A Mortgage Loan that provides
for the adjustment of the Mortgage Interest Rate payable with respect thereto in
accordance with the terms of the related Mortgage Note.

                  "Assignment": An assignment of the Mortgage, notice of
transfer or equivalent instrument sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
or transfer of the Mortgage Loan, which assignment notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages securing Mortgaged Properties located in the same county, if
permitted by applicable law and acceptable for recording by the applicable
recording office. With respect to any Mortgage Loan registered with MERS, an
Assignment shall include a notice of transfer sufficient under the governing
instruments of MERS to reflect a transfer of the Mortgage Loan. An Assignment
shall include, as applicable, such instruments as are necessary and sufficient
under the laws of the jurisdiction where a Cooperative Apartment is located to
reflect of record the sale or transfer of the Mortgage Loan and security
interest in the Mortgaged Property affecting such Cooperative Apartment.

                  "Business Day": Any day other than (i) a Saturday or Sunday,
or (ii) a day on which banking or savings associations in the States of New York
or Illinois are authorized or obligated by law or executive order to be closed.

                  "Closing Date": For each Transaction, the date on which
Servicer actually sells to Owner, and Owner actually purchases from Servicer,
the Mortgage Loans listed on the Final Mortgage Loan Schedule attached to the
respective Warranty Bill of Sale.

                  "Condemnation Proceeds": All awards or settlements in respect
of a taking of a partial or an entire Mortgaged Property by exercise of the
power of eminent domain or condemnation.

                  "Convertible Mortgage Loan": An Adjustable Rate Mortgage Loan
with a Mortgage Note that contains an option of the Mortgagor to convert the
related Mortgage Note from a Mortgage Note with an adjustable interest rate to a
Mortgage Note with a fixed interest rate.

                  "Cooperative Apartment": A dwelling unit in a multi-dwelling
building owned or leased by a cooperative housing corporation, which unit the
Mortgagor has an exclusive right to occupy pursuant to the terms of a
proprietary lease in accordance with the laws of the state in which the building
is located.

                  "Custodian": The Custodian under the Custodial Agreement, or
its successor.

                  "Custodial Account": The separate trust account or accounts
created and maintained pursuant to Section 4.04 which shall be entitled "Morgan
Stanley Dean Witter Credit


                                      -2-
<PAGE>

Corporation, in trust for Morgan Stanley Mortgage Capital Inc.," or such other
title as is requested by Owner.

                  "Custodial Agreement": The Custodial Agreement among Servicer,
Owner and the Custodian for the retention of each Mortgage Note, Mortgage,
Assignment and certain other portions of each Mortgage File, substantially in
the form attached to the Purchase Agreement as Exhibit 3, as the same may be
amended, modified, restated or supplemented from time to time.

                  "Cut-off Date": With respect to each Mortgage Loan, the, first
day of the month in which the related Closing Date occurs.

                  "Due Date": As to any Mortgage Loan, the day each Monthly
Payment is due on such Mortgage Loan exclusive of any days of grace.

                  "Eligible Account": An account that is (i) maintained at a
depository institution the short-term debt obligations (or, in the case of a
depository institution which is part of a holding company structure, the
short-term debt obligations of such parent holding company) of which have been
rated by each Rating Agency in one of its two highest short-term rating
categories at the time of the deposit therein, or (ii) a trust account
maintained with a corporate trust department of a federal or state chartered
depository institution or trust company, which institution is acting in its
fiduciary capacity.

                  "Equity Refinanced Mortgage Loan": A Refinanced Mortgage in
which the Mortgagor used less than the entire amount of the proceeds (net of any
closing costs, including discount and origination fees and prepaid items) to
refinance an existing mortgage loan and any junior lien that existed on the
related Mortgaged Property at the date of origination of the Refinanced Mortgage
Loan.

                  "Escrow Account": The separate trust account or accounts
created and maintained pursuant to Section 4.06 on which shall be entitled
"Morgan Stanley Dean Witter Credit Corporation, in trust for Owner and various
Mortgagors," or such other title as is requested by Owner.

                  "Escrow Payments": The amounts constitute ground rents, taxes,
assessments, water charges, sewer rents, mortgage insurance premiums, property
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.

                  "Event of Default": Any one of the conditions or circumstances
enumerated in Section 10.01.

                  "Fannie Mae": Fannie Mae, f/k/a the Federal National Mortgage
Association, or any successor organization.

                  "Final Mortgage Loan Schedule": The list of Mortgage Loans for
a Transaction, which list shall set forth the following information with respect
to each Mortgage Loan:

         (i)      the loan number;


                                      -3-
<PAGE>

         (ii)     the Mortgagor's name;

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

         (iv)     the Mortgage Interest Rate at origination;

         (v)      for each Adjustable Rate Mortgage Loan, the first Interest
                  Rate Adjustment Date and the first Payment Adjustment Date;

         (vi)     for each Adjustable Rate Mortgage Loan, the Gross Margin;

         (vii)    for each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap;

         (viii)   for each Adjustable Rate Mortgage Loan, the Periodic Rate Cap;

         (ix)     the original term to maturity;

         (x)      the original principal balance;

         (xi)     the first payment date;

         (xii)    the maturity date;

         (xiii)   the Monthly Payment in effect as of the related Cut-off Date;

         (xiv)    the principal balance as of the related Cut-off Date, after
                  giving effect to all payments of principal due on or before
                  such date, whether or not received;

         (xv)     the Loan-to-Value Ratio as of the date origination;

         (xvi)    a code indicating whether the Mortgaged Property is occupied
                  by Mortgagor;

         (xvii)   a code indicating the type of residential dwelling;


         (xviii)  a code indicating whether the Mortgage Loan is a purchase
                  mortgage loan, rate/term refinance loan, limited cash-out loan
                  or cash-out refinance loan;

         (xix)    a code indicating whether the Mortgage Loan is covered by a
                  Primary Mortgage Insurance Policy;

         (xx)     a code indicating whether the Mortgage Loan is a Limited
                  Documentation Mortgage Loan;

         (xxi)    a code indicating whether the Mortgage Loan is an Additional
                  Collateral Mortgage Loan;


                                      -4-
<PAGE>

         (xxii)   for each Adjustable Rate Mortgage Loan, a code indicating the
                  type of Index;

         (xxiii)  a code indicating whether the Mortgage Loan is a Balloon
                  Mortgage Loan;

         (xxv)    the Servicing Fee Rate applicable to such Mortgage Loan, and
                  if such Mortgage Loan is an Adjustable Rate Mortgage Loan
                  whose first Interest Rate Adjustment has not occurred, the
                  Servicing Fee Rate (if different) prior to the first Interest
                  Rate Adjustment Date;

         (xxvi)   a code indicating whether the Mortgage Loan is a Convertible
                  Mortgage Loan;

         (xxvii)  a code indicating whether the Mortgagor is self-employed;

         (xxviii) a code indicating the value of the Mortgagor's assets at
                  origination;

         (xxix)   Appraised Value; and

         (xxx)    a code indicating the Primary Mortgage Insurance Policy
                  provider and percent of coverage, if applicable.

Such schedule shall also set forth the weighted average of the amounts described
under (iv) above for all of the Mortgage Loans. Such list may be in the form of
more than one list, collectively setting forth all of the information required.

                  "Freddie Mac": Freddie Mac, f/k/a the Federal Home Loan
Mortgage Corporation, or any successor organization.

                  "Gross Margin": With respect to each Adjustable Rate Mortgage
Loan, the fixed number of basis points set forth in the MSA Mortgage Loan
Schedule that is added to the Index on each Interest Rate Adjustment Due Date in
accordance with the terms of the related Mortgage Note to determine the Mortgage
Interest Rate for such Mortgage Loan, subject to any applicable Periodic Rate
Cap and Lifetime Rate Cap.

                  "Index": With respect to each Adjustable Rate Mortgage Loan
and each Interest Rate Adjustment Date, the index used to determine the Mortgage
Interest Rate on such Adjustable Rate Mortgage Loan, as specified in the related
Mortgage Note, in each case as available the number of days prior to any
Interest Rate Adjustment Date set forth in the related Mortgage Note, which
index may be (i) the average of the London Interbank Offered Rates for one- or
six-month U.S. dollar deposits, as published in the "Money Rates" table of The
Wall Street Journal or elsewhere (as specified in the related Mortgage Note) on
the date or dates specified in such Mortgage Note for the determination of such
rate, (ii) the weekly average of the closing market bid yields on actively
traded U.S. Treasury securities adjusted to a constant maturity of one year,
(iii) the weekly average or the monthly average of weekly average auction rates
on U.S. Treasury bills with a maturity of six months, as published by the Board
of Governors of the Federal Reserve System in Federal Reserve Statistical
Release H.15. (519), (iv) the weekly average of the closing market bid yields on
U.S. Treasury securities adjusted to a


                                      -5-
<PAGE>

constant maturity of one (1) year, as published by the Board of Governors of the
Federal Reserve System in Federal Reserve Statistical Release H.15. (519), (v)
the weekly average of the closing market bid yields on U.S. Treasury securities
adjusted to a constant maturity of five (5) years, as published by Board of
Governors of the Federal Reserve System in Federal Reserve Statistical Release
H.15. (519), (vi) the prime rate specified in the related Mortgage Note, as
published in the "Money Rates" table of The Wall Street Journal, or elsewhere
(as specified in such Mortgage Note), (vii) the monthly weighted average cost of
funds of members of the Federal Home Loan Bank of San Francisco, (viii) such
other standard for determining the change in the interest rate as may be set
forth in the related Mortgage Note, or (ix) if such index is not so published or
is otherwise unavailable, such comparable, alternative index selected by
Servicer in accordance with the terms of the Mortgage Notes and in consultation
with Owner.

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

                  "Index": With respect to each Adjustable Rate Mortgage Loan
and each Interest Rate Adjustment Date, the index used to determine the Mortgage
Interest Rate on such Adjustable Rate Mortgage Loan as specified in the related
Mortgage Note, in each case as available the number of days prior to any
Interest Rate Adjustment Date set forth in the related Mortgage Note, which
index may be (i) the average of the London Interbank Offered Rates for one- or
six-month U.S. dollar deposits, as published in the "Money Rates" table of The
Wall Street Journal or elsewhere (as specified in the related Mortgage Note) on
the date or dates specified in such Mortgage Note for the determination of such
rate, (ii) the weekly average of the closing market bid yields on actively
traded U.S. Treasury securities adjusted to a constant maturity of one year
(iii) the weekly average or the monthly average of weekly average auction rates
on U.S. Treasury bills with a maturity of six months, as published by the Board
of Governors of the Federal Reserve System in Federal Reserve System in Federal
Reserve Statistical Release H.15. (519), (iv) the weekly average of the closing
market bid yields on U.S. Treasury securities adjusted to a constant maturity of
one (1) year, as published by the Board of Governors of the Federal Reserve
System in Federal Reserve Statistical Release H.15. (519), (v) the weekly
average of the closing market bid yields on U.S. Treasury securities adjusted to
a constant maturity of five (5) years, as published by the Board of Governors of
the Federal Reserve System in Federal Reserve Statistical Release H.15. (519),
(vi) the prime rate specified in the related Mortgage Note, as published in the
"Money Rates" table of The Wall Street Journal, or elsewhere (as specified in
such Mortgage Note), (vii) the monthly weighted average cost of funds of members
of the Federal Home Loan Bank of San Francisco, (viii) such other standard for
determining the change in the interest rate as may be set forth in the related
Mortgage Note, or (ix) if such index is not so published or is otherwise
unavailable, such comparable alternative index selected by Servicer in
accordance with the terms of the Mortgage Notes and in consultation with Owner.

                  "Interest Rate Adjustment Date": With respect to each
Adjustable Rate Mortgage Loan, the date on which the Mortgage Interest Rate is
adjusted in accordance with the terms of the related Mortgage Note.


                                      -6-
<PAGE>

                  "Lifetime Rate Cap": With respect to each Adjustable Rate
Mortgage Loan, the maximum Mortgage Interest Rate that may be borne thereby, as
set forth in the related Mortgage Note.

                  "Limited Documentation Mortgage Loan": A Mortgage Loan that
was originated pursuant to a "limited documentation" or "easy qualifier"
underwriting program.

                  "Liquidation Proceeds": Amounts, other than Insurance Proceeds
and Condemnation Proceeds, received by Servicer in connection with the
liquidation of a defaulted Mortgage Loan through a trustee's sale, foreclosure
sale or otherwise (including, but not limited to, amounts received with respect
to a an Additional Collateral Pledge Agreement), other than amounts received
following the acquisition of REO Property pursuant to Section 4.13.

                  "Loan Documents": With respect to any Mortgage Loan, the
Mortgage Note, Mortgage, and/or any other documents executed by Mortgagor and
delivered to Servicer evidencing or securing the Mortgage Loan.

                  "Loan-to-Value Ratio" or "LTV": With respect to any Mortgage
Loan as of any date on which a determination thereof is made, the ratio on such
date of the outstanding principal balance of such Mortgage Loan to the Appraisal
Value of the related Mortgaged Property.

                  "MERS": Mortgage Electronic Registration Systems, Inc.

                  "Monthly Advance": The aggregate of the advances made by
Servicer on any Remittance Date pursuant to Section 6.03.

                  "Monthly Payment": The scheduled monthly payment of interest
and, when applicable, principal on a Mortgage Loan which is payable by a
Mortgagor from time to time under the related Mortgage Note on every Due Date.

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

                  "Mortgage": The mortgage, trust deed or other instrument
securing the respective Mortgage Loan, as the same may be amended, modified,
restated or supplemented from time to time.

                  "Mortgage File": As to any Mortgage Loan, the mortgage, any
related mortgage documents and, if the Mortgaged Property is a Cooperative
Apartment, all documents relating to the security interest in a Cooperative
Apartment, including but not limited to all paper, computer generated and
microfiche records, pertaining to a particular Mortgage Loan which are specified
in Exhibit 1 hereto and any additional documents required to be added to the
Mortgage File pursuant to the Program Documents.

                  "Mortgage Interest Rate": The annual rate at which interest
accrues on any Mortgage Loan, net of any premium on any related Primary Mortgage
Insurance Policy and any continuing compensation paid to correspondent lenders;
provided that, with respect to any Adjustable Rate Mortgage Loan, the "Mortgage
Interest Rate" shall mean the annual rate applicable thereto as the same may be
adjusted on any Interest Rate Adjustment Date and subject


                                      -7-
<PAGE>

to the limitations on such interest rate imposed by the Periodic Rate Cap and
the Lifetime Rate Cap.

                  "Mortgage Loan": The "Mortgage Loans" (as defined in the
Purchase Agreement) which are subject to Agreement from time to time.

                  "Mortgage Loan Payments": With respect to each Mortgage Loan
(i) all scheduled principal due after the related Cut-off Date, (ii) all other
recoveries of principal collected after the related Cut-off Date and collected
by Servicer after the related Cut-off Date, and (iii) all payments of interest
on the Mortgage Loans at the Mortgage, Loan Remittance Rate minus that portion
of any such payment that is allocable to the period prior to the related Cut-Off
Date; provided, however, that payments of scheduled principal and interest
prepaid for a due date beyond the related Cut-off Date shall not be applied to
the principal balance as of the related Cut-off Date and the such principal and
such prepaid amounts (minus interest at the Servicing Fee Rate) shall constitute
a part of the Mortgage Loan Payments, which prepaid amounts Servicer shall
deposit into the related Custodial Account established for the benefit of Owner
for subsequent remittance by Servicer to Owner pursuant to the Amended and
Restated Master Servicing Agreement.

                  "Mortgage Loan Remittance Rate": With respect to each Mortgage
Loan, the related Mortgage Interest Rate minus the Servicing Fee Rate.

                  "Mortgage Note": The note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.

                  "Mortgaged Property": The underlying real property securing
repayment of a Mortgage Note, consisting of a fee simple or leasehold interest
in a single parcel of real proper improved by a residential dwelling or a single
Cooperative Apartment including the stock certificates evidencing ownership in
such Cooperative Apartment, the proprietary lease, and all attendant right,
title and interest thereto.

                  "Mortgagor": The obligor on a Mortgage Note.

                  "MSA Mortgage Loan Schedule": Collectively, a schedule
comprised of all Final Mortgage Loan Schedules, but excluding all Mortgage Loans
assumed or transferred by Owner, or otherwise no longer subject to servicing
under this Agreement.

                  "Officer's Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President, a Senior Vice
President, Vice President, or an Assistant Vice President of Servicer, and
delivered to Owner as required by this Agreement.

                  "Opinion of Counsel": A written opinion of counsel, who may be
counsel for Servicer, reasonably acceptable to Owner.

                  "Original Additional Collateral Requirement": With respect to
any Additional Collateral Mortgage Loan, generally thirty percent (30%) of the
original principal balance of such Mortgage Loan or such lesser percentage
thereof as specified by Servicer in connection with the origination of such
Additional Collateral Mortgage Loan.


                                      -8-
<PAGE>

                  "Owner": Owner of the Mortgage Loans.

                  "Payment Adjustment Date": With respect to each Adjustable
Rate Mortgage Loan, the first date on which payments thereon may be adjusted and
all subsequent such dates of adjustment, as set forth in the related Final
Mortgage Loan Schedule and in the related Mortgage Note.

                  "Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage Loan as to which the related Final Mortgage Loan Schedule indicates the
existence of a Periodic Rate Cap, the provision of the related Mortgage Note
that provides for a maximum amount by which the Mortgage Interest Rate may
increase (or, if so indicated on such Final Mortgage Loan Schedule, decease) on
an Interest Rate Adjustment Date above the Mortgage Interest Rate immediately
prior to such Interest Rate Adjustment Date.

                  "Permitted Investment": Any one or more of the following:

                  (i) direct obligations of, or obligations fully guaranteed as
         to 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) repurchase obligations (the collateral for which is held
         by a third party) with respect to any security described in clause (i)
         above, provided that the long-term unsecured obligations of the party
         agreeing to repurchase such obligations are at the time rated by each
         of the Rating Agencies in one of its two highest rating categories;

                  (iii) certificates of deposit, time deposits, demand deposits
         and bankers' acceptances of any bank or trust company incorporated
         under the laws of the United States or any state thereof or the
         District of Columbia, provided that the short-term commercial paper of
         such bank or trust company at the date of acquisition thereof has been
         rated by each of the Rating Agencies in its highest rating;

                  (iv) money market funds rated by each of the Rating Agencies
         in its highest short-term debt rating category;

                  (v) commercial paper (having original maturities of not more
         than 365 days) of any corporation incorporated under the laws of the
         United States or any state thereof or the District of Columbia which on
         the date of acquisition has been rated by each of the Rating Agencies
         in its highest short-term rating; and

                  (vi) any other obligation or security acceptable to each of
         the Rating Agencies (as certified by a letter from each of the Rating
         Agencies to Owner) in respect of mortgage pass through certificates
         rated in one of its two highest rating categories;

provided, that with the exception of U.S. Treasury Strips, no such instrument
shall be a Permitted Investment if such instrument evidences either (a) the
right to receive interest only payments with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument where the principal and interest


                                       -9-
<PAGE>


payments with respect to such instruments provide a yield to maturity exceeding
120% of the yield to maturity at par of such underlying obligation.

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

                  "Prepayment Interest Shortfall": With respect to any
Remittance Date and any Mortgage Loan that was the subject of a Principal
Prepayment during the related Principal Prepayment Period, an amount equal to
one month's interest at the Mortgage Loan Remittance Rate on the amount of such
Principal Prepayment, less the amount of interest (adjusted to the Mortgage Loan
Remittance Rate) paid by the Mortgagor in respect of such Principal Prepayment.

                  "Primary Mortgage Insurance Policy": With respect to each
Mortgage Loan, the policy of primary mortgage insurance, if any, in effect as
indicated on the related Mortgage Loan Schedule, or any replacement policy
therefor obtained by Servicer pursuant to the Amended and Restated Master
Servicing Agreement.

                  "Principal Prepayment Period": As to any Remittance Date, the
calendar month preceding the month of distribution.

                  "Rating Agency": Either of Standard & Poor's and Moody's.

                  "Record Date": The close of business of the last Business Day
of the month preceding the month of the related Remittance Date.

                  "Refinanced Mortgage Loan": A Mortgage Loan that was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which (net of any closing costs, including
discount and origination fees and prepaid items) were used in whole or part to
satisfy an existing mortgage.

                  "REMIC": A real estate mortgage investment conduit, as such
term is defined by the Internal Revenue Code of 1986, as amended.

                  "Remittance Date": The 18th day of any month or, if such 18th
day is not a Business Day, the first Business Day immediately following such
18th day.

                  "REO Disposition": The final sale by Servicer of any REO
Property.

                  "REO Property": A Mortgaged Property acquired by Servicer on
behalf of Owner as described in Section 4.13.

                  "Securitization Transfer": The sale or transfer of some or all
of the Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.


                                      -10-
<PAGE>

                  "Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by Servicer of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii)
enforcement or judicial proceedings, including foreclosures, bankruptcies and
defense of claims relating to the Mortgages and Mortgaged Property, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Section 4.08 and (v) paying taxes and insurance with respect
to the Mortgaged Property.

                  "Servicing Fee": With respect to any Mortgage Loan and any
Remittance Date, the fee payable monthly to Servicer pursuant to Section 7.03.

                  "Servicing Fee Rate": With respect to each Mortgage Loan, the
rate per annum set forth in the related Final Mortgage Loan Schedule as the
"Servicing Fee Rate".

                  "Servicing Officer": Any officer of Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by Servicer to Owner upon
request, as such list may from time to time be amended.

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

                  "Subservicer": Any person with which Servicer has entered into
a Subservicing Agreement and which meets the qualifications of a Subservicer
pursuant to Section 4.15.

                  "Subservicing Account": An account established by a
Subservicer which meets the requirements set forth in Section 4.20 and is
otherwise acceptable to Servicer, and which must be an Eligible Account.

                  "Subservicing Agreement": The written agreement between
Servicer and a Subservicer relating to the servicing and administration of the
Mortgage Loans as provided in Section 4.15.

                  "Surety Agreement": The Surety Bond Reimbursement Agreement
dated March 17, 1999 between the Surety Bond Issuer and Servicer pursuant to
which the Surety Bond Issuer has issued the Surety Bond, as the same may be
amended, modified, restated or supplemented from time to time.

                  "Surety Bond": The limited purpose Surety Bond, dated March
17, 1999, issued by the Surety Bond Issuer in favor of the Sellers, as the same
may be amended, modified, restated or supplemented from time to time.

                  "Surety Bond Issuer": AMBAC Assurance Corporation or its
successors.

                  "Trading Account": With respect to any Additional Collateral
Mortgage Loan as to which an Additional Collateral Pledge Agreement was made,
the account in which is held the securities and other assets that are subject to
such Additional Collateral Pledge Agreement.


                                      -11-
<PAGE>

                  "Transaction": The sale by Servicer to Owner, and the purchase
by Owner from Servicer, of one or more Mortgage Loans on a Closing Date, as
evidenced by the execution and delivery by Servicer to Morgan Stanley Mortgage
Capital Inc. as the initial Owner, of the Warranty Bill of Sale.

                  "Warranty Bill of Sale": The warranty bill of sale executed
and delivered by Servicer to Owner on a Closing Date, evidencing the sale of the
related Mortgage Loans by Servicer to Owner and setting forth certain
representations and warranties of Servicer with respect thereto, in the form
attached to the Purchase Agreement as Exhibit 8.

                                   ARTICLE II

                               BOOKS AND RECORDS;
                           TRANSFER OF MORTGAGE LOANS

                  Section 2.01 Books and Records.

                  Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the Mortgage Loans, which
shall be appropriately identified in Servicer's books and records to clearly
reflect the ownership of the Mortgage Loans by Owner, and subsequent assignments
and transfers of the Mortgage Loans pursuant to Section 2.02 hereof. At the
request of Owner, Servicer shall promptly deliver to Owner an MSA Mortgage Loan
Schedule setting forth all Mortgage Loans that Servicer then services and
administers for Owner under this Agreement; provided, however, that the
information contained on such MSA Mortgage Loan Schedule may be as of the
Closing Date for each respective Mortgage Loan and may consist of the Final
Mortgage Loan Schedule(s) attached to the Warranty Bill(s) of Sale for such
Mortgage Loans, with manual deletions or additions thereto or other revisions
thereof.

                  Section 2.02 Transfer of Mortgage Loans.

                  Owner may, with the consent of Servicer (which shall not be
unreasonably withheld), assign, sell or transfer (each, a "Transfer") any of
Owner's interest in and to any of the Mortgage Loans to any institutional
investor that has a net worth of not less than $50,000,000 and owns not less
than $250,000,000 in residential mortgage loans (each, a "Permitted
Transferee"), subject in each case to the rights of Servicer under the
provisions of this Agreement, except that no such assignment, sale, transfer,
pledge, hypothecation or encumbrance shall increase Servicer's liabilities or
obligations or decrease Servicer's rights under this Agreement, and Owner shall
remain fully liable for performance of all of its obligations as to the
transferred Mortgage Loans. As a condition precedent to any Transfer (in
addition to the other conditions set forth herein), the Permitted Transferee
shall enter into a servicing agreement with Servicer in the form of this
Servicing Agreement, but mutatis mutandis, and deliver such certificates and
opinions as Servicer may reasonably require. Upon consummation of any Transfer,
the MSA Mortgage Loan Schedule shall be amended by Servicer to reflect such
transfer. Notwithstanding the foregoing, Owner shall not, unless Owner has
obtained consent from the Servicer, which consent shall not be unreasonably
withheld, effect Transfer of (i) less than one-hundred (100) Mortgage Loans,
(ii) Mortgage Loans with an aggregate unpaid principal balance less than
$5,000,000 to any Person (iii) Mortgage Loans if the remaining Mortgage


                                      -12-
<PAGE>

Loans listed on the MSA Mortgage Loan Schedule after giving effect thereto would
have an aggregate unpaid principal balance less than $5,000,000 or (iii)
Mortgage Loans other that to a Permitted Transferee in a transaction that
complies with the terms of this Agreement.

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF SERVICER

                  Section 3.01 Representations and Warranties of Servicer.

                  Servicer represents, warrants and covenants to Owner, as of
the date of this Agreement and as of each Closing Date or as of such other date
specified below, that:

                  (i) Servicer (a) is a corporation, duly incorporated, validly
         existing and in good standing under the laws of the State of Delaware,
         (b) has all licenses necessary to carry on its business as now being
         conducted, (c) has all material licenses and is qualified and in good
         standing under the laws of each state where a Mortgaged Property is
         located unless not required under applicable law to effect such
         qualification (with no demand for such qualification having been made
         upon Servicer by any such state), and (d) is in compliance with the
         laws of any such state to the extent necessary to permit the
         enforcement of Owner's rights (either directly or through a
         Subservicer) under each Mortgage Loan and to permit the servicing of
         the Mortgage Loans in accordance with the terms of this Agreement.

                  (ii) Servicer has the full power and authority to hold each
         Mortgage Loan, to service each Mortgage Loan, to execute and deliver
         this Agreement, and to enter into and consummate all transactions
         contemplated by this Agreement. Servicer has duly authorized the
         execution, delivery and performance of this Agreement, has duly
         executed and delivered this Agreement, and this Agreement, assuming due
         authorization, execution and delivery by Owner and the enforceability
         against Owner, constitutes a legal, valid and binding obligation of
         Servicer, enforceable against it in accordance with its terms, except
         as the enforceability thereof may be limited by bankruptcy, insolvency,
         liquidation, moratorium reorganization or other similar laws affecting
         the rights of creditors generally or by general principles of equity,
         regardless of whether enforcement is sought in a proceeding in equity
         or at law.

                  (iii) The consummation of the transactions contemplated by
         this Agreement is in the ordinary course of Servicer's business and
         will not conflict with or result in a breach of any of the terms,
         conditions or provisions of Servicer's certificate of incorporation or
         by-laws or any legal restriction or any agreement or instrument to
         which Servicer is now party or by which it is bound, or constitute a
         material default or result in an acceleration under any of the
         foregoing, or result in the violation of any law, rule, regulation,
         order, judgment or decree to which Servicer or its property is subject.

                  (iv) Servicer is an approved seller/servicer for Fannie Mae or
         Freddie Mac in good standing and is a mortgagee approved by the
         Secretary of Housing and Urban Development pursuant to Section 203 of
         the National Housing Act. No event has


                                      -13-
<PAGE>

         occurred that would render Servicer unable to comply with Fannie Mae or
         Freddie Mac eligibility requirements or that would require notification
         to either Fannie Mae or Freddie Mac.

                  (v) Servicer has no reason or cause to believe that it cannot
         perform each covenant contained in this Agreement.

                  (vi) There is no action, suit, proceeding or investigation
         pending or, to Servicer's knowledge, threatened, against Servicer that,
         in Servicer's judgment, if determined adversely to Servicer, would
         materially and adversely affect the validity or enforceability of this
         Agreement or the ability of Servicer to perform its obligations
         hereunder in accordance with the terms hereof.

                  (vii) No consent, approval, authorization or order of any
         court or governmental authority is required for the execution and
         delivery of this Agreement by Servicer or for the performance by
         Servicer of its obligations hereunder, other than such consent,
         approval, authorization or order as has been obtained prior to the
         Closing Date.

                  (viii) Seller has, in its capacity as servicer for each
         Mortgage Loan, caused to be fully furnished, in accordance with the
         Fair Credit Reporting Act and its implementing regulations, accurate
         and complete information (i.e., favorable and unfavorable) on its
         borrower credit files to Equifax, Experian, and Trans Union Credit
         Information Company (three of the credit repositories), on a monthly
         basis.

                  Servicer shall indemnify Owner and hold it harmless against
any losses, damages, penalties, fines, forfeitures, legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
Servicer's representations and warranties contained in this Section 3.01. It is
understood and agreed that the obligations of Servicer set forth in this Section
3.01 to indemnify Owner as provided above constitute the sole remedies of Owner
respecting a breach of the foregoing representations and warranties.

                                   ARTICLE IV

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

                  Section 4.01 Servicer to Act as Servicer.

                  Servicer, as independent contact servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and the normal
and usual standards of practice of prudent mortgage lenders, and shall have full
power and authority, acting alone, to do or cause to be done any and all things
in connection with such servicing and administration that Servicer may deem
necessary or desirable and consistent with the terms of this Agreement.

                  Consistent with the terms of this Agreement, Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if, in Servicer's reasonable and


                                      -14-
<PAGE>

prudent determination, such waiver, modification, postponement or indulgence is
not materially adverse to Owner; provided, however, that Servicer shall not
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Interest Rate, forgive the payment of any principal or interest
payments, make future advances or extend the final maturity date on such
Mortgage Loan. Without limiting the generality of the foregoing, Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself and Owner, all instruments of satisfaction or cancellation, or
of partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Property. Owner
has provided and shall, as necessary, promptly furnish Servicer with such powers
of attorney (a form of which is attached hereto as Exhibit A) as are necessary
and appropriate and with such other documents as are necessary or appropriate to
enable Servicer to carry out its servicing and administrative duties under this
Agreement.

                  In servicing and administering the Mortgage Loans, Servicer
shall employ procedures including collection procedures and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and Owner's reliance on
Servicer.

                  Section 4.02 Collection of Mortgage Loan Payments.

                  Continuously from the date hereof until the principal and
interest on all Mortgage Loans are paid in full, Servicer shall proceed
diligently to collect all payments due under each Mortgage Loan when the same
shall become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Primary Mortgage Insurance Policy, follow such collection procedures as it
follows with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Further, Servicer will take special care in ascertaining
and estimating annual ground rents, taxes, assessments, water rates, property
insurance premiums, mortgage insurance premiums, and all other charges that, as
provided in the Mortgage, will become due and payable to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable.

                  Section 4.03 Realization Upon Defaulted Mortgage Loans.

                  Servicer shall use reasonable efforts, consistent with the
procedures that Servicer would use in servicing loans for its own account, to
foreclose upon or otherwise comparably convert the ownership of Mortgaged
Properties which secure Mortgaged Loans which come into and continue in default
and as to which no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 4.01. In addition, if an Additional
Collateral Mortgage Loan becomes a defaulted Mortgage Loan, Servicer shall make
all reasonable efforts to realize upon the Additional Collateral pertaining to
such Mortgage Loan, and any proceeds from the realization thereof (and not such
Additional Collateral itself) shall be included in the related Liquidation
Proceeds and deposited in the Custodial Account, net of any related Servicing
Advances. Servicer shall use reasonable efforts to realize upon defaulted
Mortgage Loans in such a manner as will maximize the receipt of principal and
interest by Owner, taking into account, among other things, the timing of
foreclosure proceedings and any proceedings


                                      -15-
<PAGE>

with respect to Additional Collateral. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, Servicer shall not be required to expend its own funds toward the
restoration of such property in excess of an aggregate of $2,000 during the life
of the Mortgaged Loan, unless it shall determine in its discretion (i) that such
restoration will increase the proceeds of liquidation of the related Mortgage
Loan to Owner after reimbursement to itself for such expenses, and (ii) that
such expenses will be recoverable by Servicer through Insurance Proceeds or
Liquidation Proceeds from the related Mortgaged Property, as contemplated in
Section 4.05.

                  In the event that any payment due under any Mortgage Loan
remains delinquent for a period of 90 days or more and, in the judgment of
Servicer, the related Mortgagor is not likely to become current within a
reasonable period of time, Servicer shall commence foreclosure or other
proceedings to realize upon the Mortgaged Property securing such Mortgage Loan.

                  Section 4.04 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.

                  Servicer shall establish and maintain at all times appropriate
custodial accounts for principal and interest, and taxes and insurance with
respect to the Mortgage Loans, Servicer will establish and maintain a Custodial
Account for Morgan Stanley Mortgage Capital Inc., as Owner.

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

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

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

                  (iii) All Liquidation Proceeds;

                  (iv) All Insurance Proceeds including amounts required to be
         deposited pursuant to Sections 4.08, 4.10 and 4.11, other than proceeds
         to be held in the Escrow Account and applied to the restoration or
         repair of the Mortgaged Property or released to the Mortgagor in
         accordance with Servicer's normal servicing procedures, the related
         loan documents or applicable law;

                  (v) All Condemnation Proceeds affecting any Mortgaged Property
         that are not released to the Mortgagor in accordance with Servicer's
         normal servicing procedures, the loan documents or applicable law;

                  (vi) Any Monthly Advances;


                                      -16-
<PAGE>

                  (vii) All proceeds of any Mortgage Loan repurchased in
         accordance with Section 5(c) or (d) of the Purchase Agreement, and all
         amounts required to be deposited by Servicer in connection with
         shortfalls in principal amount of Qualified Substitute Mortgage Loans
         pursuant to Section 5(c) of the Purchase Agreement;

                  (viii) Any amounts required to be deposited by Servicer
         pursuant to Section 4.11 in connection with the deductible amount of
         any blanket property insurance policy;

                  (ix) Any amounts required to be deposited by Servicer pursuant
         to Section 6.04 for the month of distribution;

                  (x) Any amounts in respect of Permitted Investments required
         to be deposited pursuant to Section 4.20;

                  (xi) Any amounts required to be deposited by Servicer in
         connection with any REO Property pursuant to Section 4.13; and

                  (xii) Any amounts required to be deposited into the Custodial
         Account pursuant to Section 7.01.

                  The foregoing requirements for deposit in the Custodial
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges and assumption fees, to the extent permitted by Section 7.01, need not
be deposited by Servicer in the Custodial Account. Any interest paid on funds
deposited into the Custodial Account by the depository institution shall accrue
to the benefit of Servicer and Servicer shall be entitled to retain and withdraw
such interest from the Custodial Account pursuant to Section 4.05(iv). In
addition, funds in the Custodial Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 4.20.

                  Section 4.05 Permitted Withdrawals From the Custodial Account.

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

                  (i) To make payments to Owner in the amounts and in the manner
         provided for in Section 6.01;

                  (ii) To reimburse itself for unreimbursed Monthly Advances
         from the related Monthly Payments collected form the Mortgagors or, to
         the extent an unreimbursed Monthly Advance is determined by the
         Servicer to be unrecoverable, from the Custodial Account;

                  (iii) To reimburse itself for unreimbursed Servicing Advances
         and for unreimbursed Servicing Fees, provided that with respect to any
         Mortgage Loan Servicer's right to such reimbursement shall be limited,
         subject to Section 4.13, to the related funds collected by Servicer
         from the Mortgagor or any Person including, but not limited to,
         Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds, and
         with respect to REO Property, funds received as rental or similar
         income. Servicer's


                                      -17-
<PAGE>

         right to the reimbursement set forth in the preceding sentence shall be
         prior to the rights of Owner to such proceeds and amounts, except that
         where Servicer is required to repurchase a Mortgage Loan pursuant to
         Section 5(c) or (d) of the Purchase Agreement, Servicer's right to such
         reimbursement shall be subsequent to the rights of Owner to receive
         payment from the Custodial Account representing the repurchase price
         set forth in Section 5(c) or (d) of the Purchase Agreement, as
         applicable, and representing all other amounts required to be paid to
         Owner with respect to such repurchased Mortgage Loan;

                  (iv) To pay itself as servicing compensation any interest
         earned on funds in the Custodial Account;

                  (v) To pay itself with respect to each Mortgage Loan that has
         been repurchased pursuant to Section 5(c) or (d) of the Purchase
         Agreement all related Monthly Payments and such other amounts as may be
         collected by Servicer from the Mortgagor or otherwise relating to such
         Mortgage Loan, provided that such Monthly Payments or other amounts
         have not been distributed as of the date on which the related
         repurchase price is determined;

                  (vi) To refund to Servicer any amount deposited in the
         Custodial Account and not required to be deposited therein; and

                  (vii) To clear and terminate the Custodial Account upon the
         termination of this Agreement.

                  Section 4.06 Establishment of Escrow Accounts; Deposits in
Escrow Accounts.

                  Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets. Servicer will
establish and maintain an Escrow Account for Morgan Stanley Mortgage Capital
Inc., as Owner. Each Escrow Account shall be an Eligible Account.

                  Servicer shall deposit in the Escrow Account or Accounts on a
daily basis, and retain therein, (i) all Escrow Payments collected on account of
the Mortgage Loans, for the purpose of effecting timely payment of any such
items as required under the terms of this Agreement, and (ii) all Insurance
Proceeds which are to be applied to the restoration or repair of any Mortgaged
Property. Servicer shall make withdrawals therefrom only to effect such payments
as are required under this Agreement, and for such other purposes as set forth
or in accordance with Section 4.07. Servicer shall be entitled to retain any
interest paid on funds deposited into the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
a Mortgagor.

                  Section 4.07 Permitted Withdrawals From Escrow Account.

                  Withdrawals from the Escrow Account may be made by Servicer
(i) to effect timely payments of ground rents, taxes, assessments, water rates,
property insurance premiums, Primary Mortgage Insurance Policy premiums, if
applicable, and comparable items, (ii) to reimburse Servicer for any Servicing
Advance made by Servicer with respect to an Escrow Payment, but only from
amounts received on the related Mortgage Loan which represent late


                                      -18-
<PAGE>

payments or collections of Escrow Payments thereunder, and only to the extent
permitted by applicable law, (iii) to refund to the Mortgagor any funds as may
be determined to be overages, (iv) for transfer to the Custodial Account in
accordance with the terms of this Agreement, (v) for application to restoration
or repair of the Mortgaged Property, (vi) to pay to Servicer, or to the
Mortgagor to the extent required by law, any interest paid on the funds
deposited into the Escrow Account, (vii) to refund to Servicer any amount
deposited in the Escrow Account and not required to be deposited therein or
(viii) to clear and terminate the Escrow Account on the termination of this
Agreement. As part of its servicing duties, Servicer shall pay to the Mortgagors
interest on funds in the Escrow Account, to the extent required by law, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.

                  Section 4.08 Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Insurance Policies; Collections Thereunder.

                  With respect to each Mortgage Loan to the extent reasonably
feasible based on information received from the Mortgagors, Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property, and Servicer shall effect payment thereof to ensure the
lien of the Mortgage remains in full force and effect by applying deposits of
the Mortgagor in the Escrow Account, where such an account is maintained in
connection with a Mortgage Loan, to the extent permitted under the terms of the
Mortgage and applicable law. In the event Servicer does not enforce, or is
prohibited by law from enforcing, the escrow requirements under a Mortgage and
does not require a Mortgagor to make deposits into the Escrow Account, Servicer
shall ensure that all ground rents, taxes, assessments, water rates, and any
other charges which are or may become a lien upon the Mortgaged Property are
paid and the lien of the Mortgage remains in full force and effect, and shall
advance its own funds, if necessary, to effect payment of the same.

                  With respect to each Mortgage Loan Servicer shall maintain or
cause to be maintained accurate records reflecting the status of property
insurance policy premiums, and shall effect payment thereof by applying deposits
of the Mortgagor in the Escrow Account, where such an account is maintained in
connection with a Mortgage Loan, to the extent permitted under the terms of the
Mortgage and applicable law. In the event Servicer does not enforce, or is
prohibited by law from enforcing the escrow requirements under a Mortgage and
does not require a Mortgagor to make deposits into the Escrow Account, Servicer
shall ensure that at all times each Mortgaged Property affected thereby is
insured by property insurance to the extent required under Section 4.10 of this
Agreement, and shall advance its own funds to effect payment of the same, if
necessary.

                  Servicer shall maintain in full force and effect a Primary
Mortgage Insurance Policy with respect to each Mortgage Loan as to which a
Primary Mortgage Insurance Policy was in effect on the related Closing Date,
which Primary Mortgage Insurance Policy shall be the same as, or conform in all
material respects to, such Primary Mortgage Insurance Policy in effect on the
related Closing Date and shall be issued by an insurer whose claims-paying
ability is satisfactory to Fannie Mae and Freddie Mac and that is licensed to do
business in the state in which the related Mortgaged Property is located. Such
coverage shall be maintained until the


                                      -19-
<PAGE>

Loan-to-Value Ratio of the related Mortgage Loan is reduced to 80% or less.
Servicer will not cancel or refuse to renew any Primary Mortgage Insurance
Policy in effect on the Closing Date that is required to be kept in force under
this Agreement unless a replacement Primary Mortgage Insurance Policy for such
canceled or nonrenewed policy is obtained from and maintained with an insurer
that satisfies the standards set forth above. Servicer shall not take any action
that would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of Servicer, would have
been covered thereunder. In connection with any assumption or substitution of
liability agreement entered into or to be entered into pursuant to Section 7.01,
Servicer shall promptly notify the insurer under the related Primary Mortgage
Insurance Policy, if any, of such assumption or substitution of liability in
accordance with the terms of such policy and shall take all actions that may be
required by such insurer as a condition to the continuation of coverage under
the Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy
is terminated as a result of such assumption or substitution of liability
Servicer shall obtain a replacement Primary Mortgage Insurance Policy as
provided above.

                  In connection with its activities as servicer, Servicer agrees
to prepare and present, on behalf of itself, and Owner, claims to the insurer
under any Primary Mortgage Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, take such action as shall
be necessary to permit recovery under any Primary Mortgage Insurance Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 4.04, any amounts
collected by Servicer under any Primary Mortgage Insurance Policy shall be
deposited into the Custodial Account, subject to withdrawal pursuant to Section
4.05.

                  Section 4.09 Transfer of Accounts.

                  Servicer may transfer the Custodial Account or the Escrow
Account to a different depository institution from time to time. Servicer shall
promptly notify Owner upon making any such transfer. In any case, the Custodial
Account and Escrow Account shall be Eligible Accounts.

                  Section 4.10 Maintenance of Property Insurance.

                  Servicer shall cause to be maintained for each Mortgage Loan
property insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in compliance with Servicer's policies as from
time to time in effect; provided, however, that coverage under such property
insurance policy shall in no event exceed the maximum amount, if any, as set
forth in any document in the Mortgage File or by applicable law. With respect to
each Mortgage Loan, Servicer shall maintain or cause to be maintained such
policy of flood insurance as is required to be maintained pursuant to the Flood
Disaster Protection Act of 1973 as amended, to the extent available. Servicer
shall also maintain on any REO Property, (a) property insurance with extended
coverage in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements (exclusive of excavations, footings,
foundations, landscaping and paving) 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 plus accrued interest at the Mortgage Interest Rate and
related Servicing Advances, (b) liability insurance and (c) to the extent
required and available under the Flood Disaster Protection Act of


                                      -20-
<PAGE>

1973, as amended, flood insurance in an amount as provided above. Pursuant to
Section 4.04, any amounts collected by Servicer under any such policies other
than amounts to be deposited into the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or REO Property, or released to
the Mortgagor in accordance with Servicer's normal servicing procedures, shall
be deposited into the Custodial Account, subject to withdrawal pursuant to
Section 4.05. Any cost incurred by Servicer in maintaining any such insurance
shall not, for the purpose of calculating distributions to the Owner, 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 need be required by Servicer of the
Mortgagor or maintained on property acquired in respect of the Mortgage Loan,
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. All such policies
shall be endorsed with standard mortgagee clauses with loss payable to Servicer,
and shall provide for at least thirty days prior written notice of any
cancellation, reduction in the amount of, or material change in, coverage to
Servicer.

                  Section 4.11 Maintenance of Mortgage Impairment Insurance
Policy.

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

                  Section 4.12 Errors and Omissions Insurance.

                  Servicer shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad coverage
with responsible companies that would meet the requirements of Fannie Mae or
Freddie Mac on all officers, employees or other persons acting in any capacity
with regard to the Mortgage Loan to handle funds, money, documents and papers
relating to the Mortgage Loan. The errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure
Servicer against losses, including forgery, theft, embezzlement and omissions
and negligent acts of such shall also protect and insure Servicer against losses
in connection with the failure to maintain any insurance policies required
pursuant to this Agreement and the release or satisfaction of a Mortgage Loan
without having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 4.12 requiring the errors and omissions insurance
shall diminish or


                                      -21-
<PAGE>

relieve Servicer from its duties and obligations as set forth in this Agreement.
The minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by Fannie Mae in the Fannie Mae
Sellers' and Servicers' Guide or by Freddie Mac in the Freddie Mac Sellers' and
Servicer's Guide. Upon request of any Owner, Servicer shall cause to be
delivered to Owner evidence of such bond and insurance policy.

                  Section 4.13 Title, Management and Disposition of REO
Property.

                  If title to a Mortgaged Property is acquired in foreclosure or
by deed in lieu of foreclosure, the deed or certificate of sale shall be taken
in the name of Owner.

                  Servicer shall either itself or through an agent selected by
Servicer, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. Servicer shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually thereafter. Servicer shall use reasonable efforts to
dispose of the REO Property in a commercially reasonable manner as soon as
possible. If Owner has notified Servicer in writing that an REO Property is held
as part of a REMIC, Servicer will make reasonable efforts to sell such REO
Property within the time necessary to preserve such REMIC status as advised by
Owner in the notice thereof.

                  Servicer shall deposit or cause to be deposited, on a daily
basis in the Custodial Account all revenues received with respect to each REO
Property and shall be permitted to withdraw therefrom, to the extent that funds
are received as rental or other similar income from such REO Property, funds
necessary for the proper operation, management and maintenance of the REO
Property, including the cost of maintaining any property insurance pursuant to
Section 4.10 hereof and the fees of any managing agent acting on behalf of
Servicer.

                  Servicer shall notify Owner of its receipt of a bona fide
offer from any REO Property. Each REO Disposition shall be carried out by
Servicer at such price and upon such terms and conditions as Owner shall
approve. If the proceeds from the REO Disposition are insufficient to reimburse
Servicer for any related unreimbursed Servicing Advances and Monthly Advances,
Servicer shall be entitled to withdraw any such deficiency from amounts on
deposit in the Custodial Account.

                  Section 4.14 Adjustments to Mortgage Interest Rates.

                  The Servicer shall make interest rate adjustments and payment
amount adjustments for each Adjustable Rate Mortgage Loan in accordance with the
terms of the related Mortgage Note and will deliver to the related Mortgagor
written notice of such adjustments in accordance with the terms of such Mortgage
Note and the requirements of applicable law.


                                      -22-
<PAGE>

                  Section 4.15 Subservicing Agreements Between Servicer and
Subservicers.

                  (a) Servicer may enter into Subservicing Agreements with
Subservicers for the servicing and administration of the Mortgage Loans. The
terms of any Subservicing Agreement shall not be inconsistent with any of the
provisions of this Agreement. Each Subservicer shall be (i) authorized to
transact business in the state or states in which the Mortgaged Properties
related to the Mortgage Loans such Subservicer is to service are situated, if
and to the extent required by applicable law to enable the Subservicer to
perform its obligations hereunder and under the Subservicing Agreement, and (ii)
a Freddie Mac - or Fannie Mae -approved mortgage servicer. Each Subservicing
Agreement must impose on the Subservicer requirements conforming to the
provisions set forth in Section 4.20 and provide for servicing of the Mortgage
Loans consistent with the terms of this Agreement.

                  (b) As part of its servicing activities hereunder, Servicer,
for the benefit of Owner, shall enforce the obligations of each Subservicer
under the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including without limitation, the
legal prosecution of claims, termination of Subservicing 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 Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans.
Servicer shall pay the costs of such enforcement, to the extent, if any, that
such recovery (i) exceeds all amounts due in respect of the related Mortgage
Loans, or (ii) is from a specific recovery of costs, expenses or attorneys' fees
against the party against whom such enforcement is directed.

                  Section 4.16 Successor Subservicers.

                  Servicer shall be entitled to terminate any Subservicing
Agreement and the rights and obligations of any Subservicer pursuant to any
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement. In the event of termination of any Subservicer, Servicer
either shall directly service the related Mortgage Loans or shall enter into a
Subservicing Agreement with a successor Subservicer which qualifies under
Section 4.15.

                  Section 4.17 Liability of Servicer.

                  Notwithstanding any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, Servicer shall remain obligated and primarily liable to Owner for
the servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 4.01 without diminution of such obligation or liability by
virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if Servicer alone were servicing and administering the
Mortgage Loans. Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of Servicer by such Subservicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.


                                      -23-
<PAGE>

                  Section 4.18 Assumption or Termination of Subservicing
Agreements.

                  In the event that Servicer or its successors shall for any
reason cease to be the Servicer of the Mortgage Loans under this Agreement,
Owner or its designee may, if Servicer does not terminate any Subservicing
Agreement in accordance with its terms, thereupon assume all of the rights and
obligations of Servicer under such Subservicing Agreement. Upon such assumption,
Owner or its designee shall be deemed to have assumed all of Servicer's interest
therein and to have replaced Servicer as a party to each Subservicing Agreement
to the same extent as if the Subservicing Agreements had been assigned to the
assuming party, except that Servicer shall not thereby be relieved of any
liability or obligations under the Subservicing Agreements, and Servicer shall
continue to be entitled to any rights or benefits, in each case, which arose
prior to its termination as servicer.

                  Servicer at its expense shall, upon the request of Owner,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use reasonable
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.

                  Section 4.19 Servicing Accounts.

                  In those cases where a Subservicer is servicing a Mortgage
Loan pursuant to a Subservicing Agreement, the Subservicer shall be required to
establish and maintain a Subservicing Account which shall be an Eligible
Account. All amounts held in a Subservicing Account shall be held in trust for
the benefit of Servicer. The Subservicer shall be required to deposit into the
Subservicing Account not later than the first Business Day after receipt all
proceeds of Mortgage Loans received by the Subservicer, less its subservicing
compensation to the extent permitted by the Subservicing Agreement, and to remit
such proceeds to Servicer for deposit in the Custodial Account not later than
the tenth day of each month, or if such tenth day is not a Business Day, the
immediately succeeding Business Day. For purposes of this Agreement, Servicer
shall be deemed to have received payments on the Mortgage Loans when the
Subservicer has received such payments pursuant to the Subservicing Agreement.

                  Section 4.20 Permitted Investments.

                  Servicer may invest the funds in the Custodial Account in
Permitted Investments, each of which shall mature not later than the Business
Day immediately preceding the Remittance Date next following the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such account, then such Permitted Investment shall
mature not later than such Remittance Date) and shall not be sold or disposed of
prior to its maturity. All such Permitted Investments shall be registered in the
name of Servicer or its nominee. All income and gain realized from any such
investment as well as any interest earned on deposit in the Custodial Account
shall be for the benefit of Servicer, and shall be withdrawn by Servicer on the
related Remittance Date. Servicer shall deposit in the Custodial Account (with
respect to investments made hereunder of funds held therein) an amount equal to
the amount of any loss incurred in respect of any such investment immediately
upon realization of such loss without right of reimbursement.


                                      -24-
<PAGE>

                                   ARTICLE V

                ADMINISTRATION AND SERVICING OF TRADING ACCOUNTS

                  Section 5.01 Servicer to Service Trading Accounts.

                  (a) Servicer represents and warrants that it will service and
administer the Trading Accounts, in accordance with the terms of (i) the
procedures it employs to administer Trading Accounts for its own benefit (as the
same may be amended from time to time) and (ii) the related Additional
Collateral Pledge Agreements.

                  (b) Servicer shall be released from its obligations to
administer the Trading Accounts as applicable upon termination of the related
Additional Collateral Pledge Agreement.

                  (c) Servicer may, without consent of Owner, amend or modify an
Additional Collateral Pledge Agreement in any non-material respect to reflect
administrative or account changes.

                  (d) Notwithstanding anything to the contrary in this Agreement
(including without limitation the termination of the Servicing rights and/or
obligations of Servicer under Article XI of this Agreement), Servicer shall
service and administer, in accordance with the terms of this Agreement and each
Additional Collateral Pledge Agreement; it being understood and agreed that only
Servicer shall service and administer the related securities accounts, lines of
credit, mortgages, and guarantors with respect to Additional Collateral Pledge
Agreements.

                  (e) When the Collateral Base is less than the Loan Amount,
Servicer shall cause cash received upon exercise of foreclosure rights under the
Additional Collateral Pledge Agreement, if it has not been previously applied to
reduce the principal balance of the Mortgage Loan, to be deposited into the
Custodial Account.

                  Section 5.02 Agreements with Respect to the Surety Bond.

                  (a) Servicer represents and warrants to Owner that the
Additional Collateral Mortgage Loans are insured under the terms and provisions
of the Surety Bond, subject to the limitations set forth therein.

                  (b) Owner will cooperate with Servicer to transfer to Owner
the coverage of the Surety Bond in respect of Additional Collateral Mortgage
Loans.

                  (c) Owner and Servicer agree that the Surety Bond Issuer is a
third party beneficiary in respect of Servicer's obligations under this Article
V.

                  (d) With respect to the sale or potential sale of the
Additional Collateral Mortgage Loans, Owner shall not use, circulate, quote or
otherwise refer to the Surety Bond Issuer or the Surety Bond for any purpose,
including but not limited to, the registration, purchase and sale of securities,
nor file the Surety Bond with, or refer to it or to the Surety Bond Issuer, as
part of any registration statement or offering document, without the express
prior written consent of the Surety Bond Issuer as to both form and substance of
such disclosure.


                                      -25-
<PAGE>

ARTICLE VI

                                PAYMENTS TO OWNER

                  Section 6.01 Distributions.

                  On each Remittance Date, and subject to Section 6.03(c),
Servicer shall distribute to Owner (i) all amounts due on the Due Date
immediately preceding the related Remittance Date with respect to
Scheduled/Scheduled Mortgage Loans (which shall include all scheduled interest
and principal), net of charges against or withdrawals from the Custodial Account
pursuant to clauses (ii) through (vi) of Section 4.05, plus any Principal
Prepayments received during the related Principal Prepayment Period, minus (iii)
any amounts attributable to Monthly Payments collected as to Mortgage Loans
serviced on a Scheduled/Scheduled basis but due on a Due Date or Due Dates
subsequent to the current Remittance Date.

                  Subject to Section 6.03(c), all distributions made to Owner on
each Remittance Date will be made to Owner of record on the preceding Record
Date, and shall be based on the Mortgage Loans owned and held by Owner, and
shall be made by wire transfer of immediately available funds to the account of
Owner at a bank or other entity having appropriate facilities therefor, or if
Owner shall have so notified Servicer, by check mailed to the address of Owner
as provided for in Section 12.06.

                  With respect to any remittance received by Owner on or after
the second Business Day following the Business Day on which such payment was
due, Servicer shall pay to Owner interest on any such late payment at in annual
rate equal to the rate of interest as is publicly announced from time to time at
its principal office by Chase Manhattan Bank, N.A., New York New York, as its
"prime" lending rate, adjusted as of the date of each change, plus one (1)
percentage point, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be paid by Servicer to Owner on the date
such late payment is made and shall cover the period commencing with the day
following such second Business Day and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along with
such late payment. The payment by Servicer of any such interest shall not be
deemed an extension of time for Payment or a waiver of any Event of Default by
Servicer.

                  Section 6.02 Statements to Owner.

                  Not later than the tenth (10th) day of each month, Servicer
will furnish to Owner a monthly remittance advice in an electronic format (i.e.
Microsoft Excel) substantially similar to Exhibit C, which monthly remittance
advice will be generated as of the expiration of the preceding month.

                  Servicer shall provide Owner with such information concerning
the Mortgage Loans as is necessary for Owner to prepare its federal income tax
return as Owner may reasonably request from time to time.


                                      -26-
<PAGE>

                  Section 6.03 Monthly Advances by Servicer.

                  (a) With respect to each Mortgage Loan subject to Section
6.03(c), on each Remittance Date Servicer shall, pursuant to Section 6.01, remit
to Owner as to Scheduled/Scheduled Mortgage Loans, the total of all scheduled
Monthly Payments due on the preceding Due Date whether or not such Monthly
Payments were collected from the Mortgagor. Any amounts which are due but
uncollected shall be funded by using excess cash collections from the Custodial
Account.

                  (b) If the collections on deposit in the Custodial Account on
the Remittance Date are less than the amount of the required monthly remittance,
Servicer shall, subject to subsection (c) below, make a Monthly Advance by
depositing to the Custodial Account enough of its own funds to make the total on
deposit equal the full amount of the remittance due Owner. Servicer may
reimburse itself for its advances from Mortgagor collections that are
subsequently deposited into the Custodial Account to the extent provided in
Section 4.05.

                  (c) If Servicer determines, in its reasonable judgment, that
any uncollected payment due from a Mortgagor that is due to be paid to Owner
pursuant to Section 6.01 would not be recoverable from Liquidation Proceeds or
other payments or recoveries (including Insurance Proceeds or Condemnation
Proceeds) on the related Mortgage Loan, then Servicer will ensure that the
amount considered to be nonrecoverable will not be funded from excess
collections or advanced by Servicer, and will therefore not be remitted to Owner
until the earlier to occur of (a) the repurchase of the Mortgage Loan by
Servicer, if applicable, or (b) the acquisition or disposition of title to the
related Mortgaged Property through foreclosure or otherwise, and then shall only
be paid to the extent of such recovery.

                  (d) With respect to any Mortgage Loans determined to be
unrecoverable and whose Monthly Payments are omitted from the scheduled monthly
remittance, Servicer shall deliver an Officer's Certificate to Owner setting
forth the basis of such determination.

                  Section 6.04 Compensating Interest.

                  Not later than the close of business on the Business Day
preceding each Remittance Date, Servicer shall from its own funds deposit in the
Custodial Account an amount equal to the lesser of (i) the aggregate of the
Prepayment Interest Shortfalls, if any, that exist in respect of the related
Principal Prepayment Period and (ii) the aggregate of the Servicing Fees for the
most recently ended calendar month.

                  If for any reason Servicer fails to process any Principal
Prepayment on a timely basis in accordance with Section 4.04(i), Servicer shall
from its own funds deposit in the Custodial Account, interest at the Mortgage
Interest Rate on the Principal Prepayment for the period the deposit into the
Custodial Account was delayed.


                                      -27-
<PAGE>

                                  ARTICLE VII

                           GENERAL SERVICING PROCEDURE

                  Section 7.01 Assumption Agreements.

                  If Servicer acquires actual knowledge that a Mortgagor has
transferred or proposes to transfer the related Mortgaged Property, Servicer
shall enforce any related "due-on-sale" clause consistent with its practices for
mortgage loans it services for its own account. If Servicer elects not to
enforce such due-on-sale clause, Servicer may enter into an assumption agreement
with the party to whom such Mortgaged Property is to be or has been conveyed. If
any assumption fee is collected by Servicer for entering into an assumption
agreement, Servicer shall be entitled to retain a portion of such fee up to an
amount equal to 1% of the outstanding principal balance of the related Mortgage
Loan as additional servicing compensation, and shall deposit into the Custodial
Account any portion thereof that exceeds 1% of such outstanding principal
balance.

                  Section 7.02 Satisfaction of Mortgages and Release of Mortgage
Files.

                  Upon the payment in full of any Mortgage Loan, Servicer shall
execute any document necessary to satisfy the Mortgage Loan and request delivery
to it of the portion of the Mortgage File held by Owner or the Custodian. Upon
receipt of such request, the related mortgage documents shall be released to
Servicer within seventy-two (72) hours and Servicer shall prepare and process
any satisfaction or release. No expense incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Custodial Account or Owner.

                  To the extent that Owner acts as its own custodian, from time
to time and as appropriate for the servicing or foreclosure of the Mortgage
Loan, including for this purpose collection under any Primary Mortgage Insurance
Policy, Owner shall, upon request of Servicer and delivery to Owner of a
servicing receipt signed by a Servicing Officer, release the requested portion
of the Mortgage File held by Owner to Servicer. The Owner shall promptly deliver
the request to return the related Mortgage documents to the Custodian. Servicer
shall return the Mortgage documents to Owner when the need therefor by Servicer
no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited into the
Custodial Account or the Mortgage File or such document has been delivered to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage Loan
was liquidated, the servicing receipt shall be released by Owner to Servicer.

                  Section 7.03 Servicing Compensation.

                  In addition to any other fees to which Servicer is entitled
hereunder, as compensation for its services hereunder, Servicer shall be
entitled to a Servicing Fee payable with respect to each Mortgage Loan. As to
each Mortgage Loan, the Servicing Fee shall (i) be


                                      -28-
<PAGE>

payable monthly from payment of interest on such Mortgage Loan prior to the
deposit of such payments into the Custodial Account, (ii) accrue at the
applicable Servicing Fee Rate, and (iii) be computed on the basis of the same
principal amount and for the same period respecting which such interest payment
was computed. Servicer shall be entitled to recover accrued but unpaid Servicing
Fees in respect of any Mortgage Loan to the extent permitted by Section 4.05.
Servicer's right to the Servicing Fee shall not be transferred in whole or in
part except in connection with the transfer of all Servicer's obligations under
this Agreement. Servicing compensation in addition to the Servicing Fee, in the
form of assumption fees as provided in Section 7.01, interest paid on funds
deposited in the Escrow Account to the extent permitted by Section 4.06, default
interest in excess of the Mortgage Interest Rate and late payment charges, in
each case to the extent collected, shall be retained by Servicer and shall not
be required to be deposited into the Custodial Account. Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided for herein.

                  Section 7.04 Annual Statement as to Compliance.

                  Servicer will deliver to Owner on or before March 15 of each
year, beginning with March 15 of the calendar year after the year in which the
first Closing Date occurs, an Officer's Certificate stating that (i) a review of
the activities of Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officer's supervision, and (ii) to
the best of such officer's knowledge, based on such review, Servicer has
fulfilled all of its material obligations under this Agreement throughout such
year in all material respects, 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.

                  Section 7.05 Annual Independent Certified Public Accountants'
Servicing Report.

                  On or before March 15 of each year, beginning with March 15 of
the calendar year after the year in which the first Closing Date occurs,
Servicer at its expense shall cause a firm of independent certified public
accountants (which may also render other services to Servicer) to furnish a
report to Owner to the effect that certain Mortgage Loans serviced by Servicer
were included in the total population of Mortgage Loans subject lo selection for
testing in such firm's examination of certain documents and records, that such
examination was conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers and that such examination disclosed no
items of material noncompliance with the provisions of the Uniform Single
Attestation Program for Mortgage Bankers, except for such items of noncompliance
as shall be set forth in such report.

                  Section 7.06 Owner's Right to Examine Servicer Records.

                  Owner shall have the right to examine and audit upon
reasonable prior written notice, during business hours or at such other times as
might be reasonable under applicable circumstances, any and all of the books,
records, documentation or other information of Servicer, or held by another for
Servicer or on its behalf or otherwise, which may be relevant to the performance
or observance by Servicer of the terms, covenants or conditions of this
Agreement.


                                      -29-
<PAGE>

                  Servicer shall provide to Owner and any supervisory agents or
examiners which may relate to Owner access to any documentation regarding the
Mortgage Loans which may be required by all applicable regulations. Such access
shall be afforded without charge, upon reasonable request, during normal
business hours and at the offices of Servicer.

                  Neither Owner nor Servicer shall, nor will they permit any of
their respective affiliates, employees, agents or representatives to, divulge or
disclose, directly or indirectly, any information concerning the Mortgage Loans
in violation of any law. Neither party shall, nor shall they permit any of their
respective affiliates, employees, agents or representatives to, divulge or
disclose, directly or indirectly, any information concerning the business
practices of the other party to this Agreement. This paragraph does not apply to
information which is not confidential or which has been published or otherwise
made available to the general public prior to the date of this Agreement, or
information required to be released under law or by or to any regulatory,
administrative or judicial body or agency or the furnishing by either party of
information to their respective affiliates, auditors, or attorneys.

                  Section 7.07 Annual Certification.

                  With respect to any Mortgage Loans sold in a Securitization
Transfer where Servicer is the servicer, Servicer agrees that on or before March
10th of each year beginning March 10, 2005, Servicer shall deliver to the
depositor, the master servicer (if any) and the trustee for the securitization
trust in the Securitization Transfer, and their officers, directors and
affiliates, a certification in the form attached as Exhibit B hereto, executed
by the senior officer in charge of servicing at Servicer for use in connection
with any Form 10-K to be filed with the Securities and Exchange Commission with
respect to the securitization trust. Servicer shall indemnify and hold harmless
the depositor, the master servicer (if any) and the trustee, and their
respective officers, directors and affiliates, from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments and other costs and expenses arising out of or based upon any
breach of the Servicer's obligations under this paragraph or any material
misstatement or omission, negligence, bad faith or willful misconduct of
Servicer in connection therewith. If the indemnification provided for in the
preceding sentence is unavailable or insufficient to hold harmless any
indemnified party, then Servicer agrees that it shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities of such indemnified party in such proportion as is
appropriate to reflect the relative fault of such indemnified party, on the one
hand, and Servicer, on the other, in connection with a breach of the Servicer's
obligations under this paragraph or any material misstatement or omission,
negligence, bad faith or willful misconduct of Servicer in connection therewith.


                                      -30-
<PAGE>

                                  ARTICLE VIII

                        REPORTS TO BE PREPARED BY COMPANY

                  Section 8.01 Servicer Shall Provide Information as Reasonably
Required.

                  During the terms of this Agreement Servicer shall furnish any
reports, or documentation that Owner may reasonably request. Reports requested
may include reports not specified or otherwise required by this Agreement, for
example, reports with respect to REO Properties, or reports required to comply
with any regulations regarding any supervisory agents or examiners of Owner. All
reports will be delivered in accordance with Owner's reasonable instructions and
directions. If the reports or other information requested will require Servicer
to incur additional costs or expenses outside of its normal servicing
procedures, Owner agrees to reimburse Servicer for those costs and expenses.
Servicer agrees to execute and deliver all such instruments and take all such
action as Owner, from time to time, may reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.

                                   ARTICLE IX

                                    SERVICER

                  Section 9.01 Indemnification; Third Party Claims.

                  (a) Each party hereto agrees to indemnify the other party and
hold harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses
that the other party may sustain in any way related to the breach of such party
in performing its duties and obligations under this Agent.

                  (b) Servicer shall (i) promptly notify Owner if a material
claim is made by any party with respect to this Agreement or the Mortgage Loans,
(ii) assume the defense of any such claim and pay all expenses in connection
therewith, including attorneys' fees, and (iii) promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or Owner in
respect of such claim. Servicer shall follow any written instructions received
from Owner in connection with such claim. Owner shall promptly reimburse
Servicer for all amounts paid or advanced by it pursuant to the preceding
sentence, except as to amounts as to which Servicer is required to indemnify
Owner pursuant to Section 3.01.

                  Section 9.02 Merger or Consolidation of Servicer.

                  Servicer will keep in full effect its existence, rights and
franchises as a corporation, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. Any Person into which Servicer way be merged or
consolidate, or any corporation resulting from any merger, conversion or
consolidation to which Servicer shall be a party, or any Person succeeding to
the business of Servicer, shall be the successor of Servicer


                                      -31-
<PAGE>

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.

                  Section 9.03 Limitation on Liability of Servicer and Others.

                  Neither Servicer nor any of the officers, employees or agents
of Servicer shall be under any liability to any Owner for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect Servicer or any such person against any breach of warranties
or representations made herein, or failure to perform its obligations
substantially in accordance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by of any breach of
the terms and conditions of this Agreement. Servicer and any officer, employee
or agent of Servicer may rely in good faith on any document of any kind
appearing to be properly executed and submitted by any Person respecting any
matters arising hereunder. Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action which is not incidental to its duties
to service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expenses or liability; provided, however, that
Servicer may, with the consent of Owner, undertake any such action which it may
deem necessary or desirable in respect to this Agreement and the rights and
duties of the parties hereto. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities for which Owner will be liable. Servicer shall be entitled to be
reimbursed therefor from Owner upon written demand.

                  Section 9.04 Servicer Not to Resign.

                  Subject to Section 12.04, Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) by mutual consent of
Servicer and Owner, (ii) upon the determination that its duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
Servicer (any such determination permitting the resignation of Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to Owner), (iii)
following any breach of this Agreement by Owner, or (iv) in connection with a
sale of substantially all of the assets of Servicer. No such resignation shall
become effective until a successor shall have assumed Servicer's
responsibilities and obligations hereunder in the manner provided in Section
12.01.

                  Section 9.05 No Transfer of Servicing.

                  Servicer shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Owner, which
consent shall not be unreasonably withheld.

                  Any successor appointed as provided herein shall be an
institution which is a Fannie Mae and Freddie Mac approved servicer in good
standing, which has a net worth of at least $15,000,000 and shall execute,
acknowledge and deliver to Owner an instrument accepting such appointment,
whereupon such successor shall become fully vested with all the rights,


                                      -32-
<PAGE>

powers, duties, responsibilities, obligations and liabilities of Servicer, with
like effect as if originally named as a party to this Agreement.

                                    ARTICLE X

                                     DEFAULT

                  Section 10.01 Events of Default.

                  If one or more of the following "Events of Default" by
Servicer shall occur and be continuing:

                  (i) any failure by Servicer to remit to Owner any payment
         required to be made under the terms of this Agreement which continues
         unremedied for a period (3) Business Days after the date on which
         written notice of such failure, requiring the same to be remedied,
         shall have been given to Servicer by Owner; or

                  (ii) failure on the part of Servicer duly to observe or
         perform in any material respect any other of the covenants or
         agreements on the part of Servicer set forth in this Agreement which
         continues unremedied for a period of thirty (30) days (except that such
         number of days shall be fifteen (15) in the case of a failure to pay
         any premium for any insurance policy required to be maintained under
         this Agreement) after the date on which written notice of such failure,
         requiring the same to be remedied, shall have been given to Servicer by
         Owner; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction for the appointment of a conservator,
         receiver or liquidator in any insolvency readjustment of debt,
         marshaling of assets and liabilities or similar proceedings, or for the
         winding-up or liquidation of its affairs, shall have been entered
         against Servicer and such decree or order shall have remained in force
         undischarged or unstayed for a period of sixty (60) days; or

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

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

                  (vi) Servicer ceases to be eligible to sell Mortgage Loans to
         and service Mortgage Loans for Fannie Mae and Freddie Mac, and
         continues to be ineligible to sell Mortgage Loans to and service
         Mortgage Loans for Fannie Mae and Freddie Mac for a period of sixty
         (60) days after the date on which written notice of such ineligibility
         shall have been given to Servicer by Fannie Mae and Freddie Mac;


                                      -33-
<PAGE>

                  (vii) except as set forth in Section 9.05, Servicer attempts
         to assign its right to servicing compensation hereunder or Servicer
         attempts, without the consent of the Owner, to sell or otherwise
         dispose of all or substantially all of its property or assets or to
         assign this Agreement or the servicing responsibilities hereunder or to
         delegate its duties hereunder or any portion thereof;

then, and in each and every such case, so long as an Event of Default shall not
have been remedied, Owner, by notice in writing to Servicer, in addition to
whatever rights Owner may have at law or in equity to damages, including
injunctive relief and specific performance, may terminate all the rights and
obligations of Servicer under this Agreement and in and to the Mortgage Loans
and the proceeds thereof other than, with respect to any Additional Collateral
Mortgage Loan, the obligation to administer the related Additional Collateral
Pledge Agreement. On or after the receipt by Servicer of such written notice,
(i) all authority and power of Servicer under this Agreement, whether with
respect to the Mortgage Loan or otherwise, shall pass to and be vested in the
successor appointed pursuant to Section 12.01, except with respect to any
related Additional Collateral Pledge Agreement, and (ii) upon further written
request from Owner, Servicer shall prepare, execute and deliver, any and all
documents and other instruments, deliver to the successor all Mortgage Files,
and do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, including the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at Servicer's sole expense. Servicer agrees to cooperate with Owner
and such successor in effecting the termination of Servicer's responsibilities
and rights hereunder as provided above, including, without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Mortgage Loans.

                  Section 10.02 Waiver of Defaults.

                  Owner may waive any default by Servicer in the performance of
its obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.

                                   ARTICLE XI

                                   TERMINATION

                  Section 11.01 Termination.

                  The respective obligations and responsibilities of Servicer
shall terminate upon: (i) the later the final payment or other liquidation (or
any advance with respect thereto) of the last Mortgage Loan or the disposition
of all REO Property and the remittance of all funds due hereunder, (ii) mutual
consent of Servicer and Owner in writing, (iii) at the election of Owner or
Servicer at any time upon thirty (30) days prior written notice to the other if
the aggregate outstanding principal balance of all Mortgage Loans subject to
this Agreement shall be less than $5,000,000, (iv) a resignation permitted by
Section 9.04 hereof, or (v) the repurchase by Servicer


                                      -34-
<PAGE>

of all Mortgage Loans and all REO Property at a price equal to 100% of the
outstanding principal balance of each Mortgage Loan on the day of repurchase,
plus accrued interest thereon at the Mortgage Loan Remittance Rate to the first
day of the month following repurchase, plus the appraised value of any such REO
Property determined at the expense of Servicer by an appraiser mutually agreed
upon by Servicer and Owner.

                                  ARTICLE XII

                            MISCELLANEOUS PROVISIONS

                  Section 12.01 Successor to Servicer.

                  Prior to termination of Servicer's responsibilities and duties
under this Agreement pursuant to Sections 9.04, 10.01, 11.01 or 12.04, Owner
shall (i) succeed to and assume all of Servicer's responsibilities, rights,
duties and obligations under this Agreement, or (ii) appoint a successor who is
a Fannie Mae / Freddie Mac approved servicer having a net worth of not less than
$15,000,000 and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of Servicer under this Agreement prior
to the termination of Servicer's responsibilities, duties and liabilities under
this Agreement.

                  In connection with such appointment and assumption, Owner may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree. In the event that
Servicer's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to one of the aforementioned Sections, Servicer shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of Servicer pursuant to the aforementioned Sections shall not become
effective until a successor shall be appointed pursuant to this Section and
shall in no event relieve Servicer of the representations and warranties made
pursuant to Section 3.01 hereof or Section 5 of the Purchase Agreement and the
remedies available to Owner hereunder and thereunder.

                  Any successor appointed as provided in this Section 12.01
shall execute, acknowledge and deliver to Servicer and to Owner an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of Servicer, with like effect as if originally named as a party to
this Agreement. Any termination or resignation of Servicer or termination of
this Agreement pursuant to Section 9.04, 10.01, 11.01, or 12.04 shall not affect
any claims that Owner may have against Servicer arising prior to any such
termination or resignation.

                  Servicer shall in a timely and reasonable manner deliver to
the successor the funds in the Custodial Account and the escrow Account and the
Mortgage Files and related documents and statements held by it hereunder and
Servicer shall account for all funds. Servicer shall execute and deliver such
instruments and do such other things all as may reasonably be required to more
fully and definitely vest and confirm in the successor all such rights, powers,


                                      -35-
<PAGE>

duties and responsibilities of Servicer. The successor shall make arrangements
as it may deem appropriate to reimburse Servicer for amounts Servicer actually
expended pursuant to this Agreement which Servicer is entitled to retain
hereunder and which would otherwise have been reimbursable to Servicer pursuant
to this Agreement but for the appointment of the successor servicer.

                  Section 12.02 Amendment.

                  This Agreement may be amended from time to time by Servicer
and Owner only by written agreement signed by Servicer and Owner. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.

                  Section 12.03 Assignments.

                  The Assignments shall not be recorded for so long as Servicer
is Servicer under this Agreement. In the event that Servicer shall assign this
Agreement to a Person (other than as provided in Section 9.02 or as a result of
an assignment to an affiliate of Servicer), then, at Owner's request, the
Assignments of Mortgages shall be recorded in the name of Owner or in the name
of a Person designated by Owner in all appropriate public offices for real
property records. All recording fees related to such recordation hereunder shall
be paid by Owner.

                  Section 12.04 Assignment of Servicing Rights.

                  Servicer may assign the servicing rights with respect to the
Mortgage Loans upon the written consent of Owner, which consent shall not be
unreasonably withheld or delayed; provided however, Servicer may, without the
consent of Owner enter into one or more Subservicing Agreements relating to the
Mortgage Loans; further provided however that notwithstanding any subservicing
arrangement, Servicer shall remain liable to Owner for all obligations and
responsibilities set forth in this Agreement.

                  Section 12.05 Governing Law.

                  This Agreement is to be governed by, and construed in
accordance with, the internal laws (as compared to conflicts of law provisions)
of the State of New York. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.

                  Section 12.06 Assignment by Owner.

                  The Owner shall have the right, without the consent of
Servicer hereof, to assign, in whole or in part, its interest under this
Agreement with respect to some or all of the Mortgage Loans, and designate any
person to exercise any rights of the Owner hereunder, and the assignee or
designee shall accede to the rights and obligations hereunder of the Owner with
respect to such Mortgage Loans. All references to the Owner in this Agreement
shall be deemed to include its assignee or designee to the extent of such
assignment. Except as otherwise expressly


                                      -36-
<PAGE>

provided herein, this Agreement shall not be assigned, pledged or hypothecated
by Servicer to a third party without the consent of the Owner. This Agreement
shall bind and inure to the benefit of and be enforceable by Servicer and the
Owner and the respective permitted successors and assigns of Servicer and the
successors and assigns of the Owner.

                  Section 12.07 Notices.

                  Any notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been duly
given if personally delivered, sent by overnight courier, or mailed by
registered mail, postage prepaid, and return receipt requested, or transmitted
by telex or telegraph and confirmed by a similar mailed writing, or otherwise
received, if to Owner, addressed to Owner at 1633 Broadway, New York, NY 10019,
Attention: Whole Loan Operations Manager or to such other address as Owner may
designate in writing to Servicer, and, if to Servicer, addressed to Morgan
Stanley Dean Witter Credit Corporation at 2500 Lake Cook Road, Riverwoods, IL
60015, Attention: Law Division, Secondary Marketing, at the same address, or to
such other address as Servicer may have designated in writing to Owner.

                  Section 12.08 Severability Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, the
invalidity of any such covenant, agreement, provision or term of this Agreement
shall in no way affect the validity or enforceability of the other provisions of
this Agreement.

                  Section 12.09 Exhibits.

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

                  Section 12.10 General Interpretive Principles.

                  For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

                  (i) the terms defined in this Agreement have the meanings
         assigned to them in this Agreement and include the plural as well as
         the singular, and the use of any gender herein shall be deemed to
         include the other gender;

                  (ii) accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with generally accepted
         accounting principles;

                  (iii) references herein to "Articles", "Sections",
         "Subsections", "Paragraphs", and other subdivisions without reference
         to a document are designated Articles, Sections, Subsections,
         Paragraphs and other subdivisions of this Agreement;


                                      -37-
<PAGE>

                  (iv) a reference to a Subsection without further reference to
         a Section is a reference to such Subsection as contained in the same
         Section in which the reference appears, and this rule shall also apply
         to Paragraphs and other subdivisions;

                  (v) the words "herein", "hereof", "hereunder" and other words
         of similar import refer to this Agreement as a whole and not to any
         particular provision; and

                  (vi) the terms "include" or "including" shall mean without
         limitation by reason of enumeration.

                  Section 12.11 Reproduction of Documents.

                  This Agreement and all documents relating thereto, including,
without limitation, (i) consents, waivers and modifications which may hereafter
be executed (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

                  Section 12.12 Successors and Assigns.

                  The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and permitted assigns of the
parties hereto.

                  Section 12.13 Counterparts.

                  This Agreement may be executed in several counterparts, each
of which shall constitute an original, but all of which together, shall
constitute one instrument notwithstanding that all parties are not signatories
to the same counterparts.

                  Section 12.14 Non-Solicitation.

         (a) From and after the Closing Date, the Servicer agrees that it will
not take any action or cause any action to be taken by its agents to solicit the
Mortgagor under any Mortgage Loan to refinance a Mortgage Loan, in whole or in
part, without the prior written consent of Owner. It is understood and agreed
that promotions for refinance undertaken by the Servicer or its agents that are
directed to segments of the general public, or to all or segments of the clients
of Morgan Stanley & Co. and its affiliates which may include Mortgagors under
any Mortgage Loan, including, without limitation, direct marketing solicitations
and newspaper, radio and television advertisements, shall not constitute a
solicitation under the terms of this Agreement; provided, however, that no
segment shall consist exclusively of such Mortgagors.

         (b) From and after the Closing Date, the Owner agrees that it will not
take any action or cause any action to be taken by its agents to solicit the
Mortgagor under any Mortgage Loan for


                                      -38-
<PAGE>

any purpose, without the prior written consent of Servicer; provided that, the
foregoing shall not restrict the Owner's right to contact, with the prior
knowledge of the Servicer, any Mortgagor, to the extent deemed reasonably
necessary by the Owner to resolve issues related to loss mitigation, in
connection with such Mortgagor's Mortgage Loan. It is understood and agreed that
promotions for any purpose undertaken by the Owner or its agents that are
directed to segments of the general public, or to all or segments of the clients
of the Owner and its affiliates which may include Mortgagors under any Mortgage
Loan, including, without limitation, direct marketing solicitations and
newspaper, radio and television advertisements, shall not constitute a
solicitation under the terms of this Agreement.



                            [Signature Page Follows]


                                      -39-
<PAGE>

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the day
and year first set forth above.


                                   Morgan Stanley Mortgage Capital Inc.

                                   By:  /s/ Eric Kaplan
                                        ----------------------------------------
                                   Name: Eric Kaplan
                                   Title: Vice President

                                   Morgan Stanley Dean Witter Credit Corporation

                                   By:  /s/ David L. Bianucci
                                        ----------------------------------------
                                   Name: David L. Bianucci
                                   Title: Vice President



<PAGE>


                                    EXHIBIT A

                        FORM OF LIMITED POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS, that __________ ("Owner")
having its principal place of business at ________________ hereby constitutes
and appoints Morgan Stanley Dean Witter Credit Corporation ("Servicer"), a
Delaware corporation, having its principal place of business at 2500 Lake Cook
Road, Riverwoods, Illinois 60015, by and through any of its Vice Presidents or
more senior officers, its true and lawful Attorney-in-Fact, in its name, place
and stead and for its benefit, in connection with all residential mortgage loans
serviced by Servicer for Owner for the purposes of performing all acts and
executing all documents in the name of Owner necessary and incidental to
servicing said loans, including but not limited to:

(1) Foreclosing delinquent loans or discontinuing such foreclosure proceedings,
executing claims for insurance benefits under private mortgage insurance
policies and endorsing related proceeds checks made payable to Owner;

(2) Selling, transferring or otherwise disposing of real property acquired
through foreclosure or otherwise, including but not limited to executing all
contracts, agreements, deeds, assignments or other instruments reasonably
necessary or advisable to effect such sale, transfer or disposition, and
receiving proceeds and endorsing checks made payable to the order of Owner from
such proceedings;

(3) Preparing, executing and delivering satisfactions, cancellations,
discharges, or full or partial releases of lien, subordination agreements,
modification agreements, assumption agreements, and substitutions of trustees
under deeds of trust;

(4) Endorsing promissory notes and executing assignments of mortgages, deeds of
trust, deeds to secure debt and other security instruments securing said
promissory notes in connection with loans for which Servicer has received full
payment of all outstanding amounts due; and

(5) Any and all such other acts of any kind and nature whatsoever that are
necessary and prudent to service the loans.

Owner further grants to Servicer full power and authority to do and perform all
acts necessary for Servicer to carry into effect the power or powers granted by
or under this Limited Power of Attorney as fully as Owner might or could do with
the same validity as if all and every such act had been herein particularly
stated, expressed and especially provided for, and hereby ratifies and confirms
all that Servicer shall lawfully have done, do, or cause to be done by virtue of
the powers and authority and contemplated hereby. This Limited Power of Attorney
shall be effective as of ___________, _____.

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of Attorney, and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect until revoked
in writing by Owner. Third parties without actual


<PAGE>

notice may rely upon a certificate to the effect set forth in the preceding
sentence given by Servicer.


ATTEST

                                              By:
Name:                                            Name:
Title:                                           Title:

                                              Corporate Seal:


STATE OF                            )
                                    )   ss.:
COUNTY OF                           )

                  On the __day of____, 20__, before me, the undersigned, a
Notary Public in and for said county and state, personally appeared
_____________________ and ___________________, personally known to me to be the
persons who executed the within instrument as _____________________ and
______________________, respectively, on behalf of the corporation therein
named, and they duly severally acknowledged that they reside at
__________________________________ and that said instrument is the act and deed
of said corporation, and that they, being authorized to do so, executed and
delivered said instrument and affixed the corporate seal thereto for the
purposes therein contained.

                  Witness my hand and official seal:



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

                                      Notary Public State of
                                                             -------------------
                                      My Commission Expires:
                                                             -------------------

<PAGE>


                                    EXHIBIT B

                              ANNUAL CERTIFICATION

Re:      [_______________] (the "Trust"), Mortgage Pass-Through Certificates,
         Series [_____], issued pursuant to the Pooling and Servicing Agreement,
         dated as of [_____], 200_ (the "Pooling and Servicing Agreement"),
         among [_____], as depositor (the "Depositor"), [_____], as trustee (the
         "Trustee"), [_____], as servicer (the "Servicer"), and [_____], as
         responsible party

                  I, [identify the certifying individual], certify to [the
Depositor], [the Trustee], [the Servicer] and their officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:

                  (a) Based on my knowledge, the information in the Annual
         Statement of Compliance, the Annual Independent Public Accountant's
         Servicing Report and all servicing reports, officer's certificates and
         other information relating to the servicing of the Mortgage Loans
         submitted to [the Depositor] [the Trustee] [the Servicer] during the
         preceding calendar year 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 date of this
         certification;

                  (b) Based on my knowledge, the servicing information required
         to be provided to [the Depositor] [the Trustee] [the Servicer] by the
         Company under this Agreement has been provided to [the Depositor] [the
         Trustee] [the Master Servicer];

                  (c) I am responsible for reviewing the activities performed by
         the Company under the Agreement and based upon the review required by
         this Agreement, and except as disclosed in the Annual Statement of
         Compliance and the Annual Independent Public Accountant's Servicing
         Report submitted to the [the Depositor] [the Trustee] [the Master
         Servicer], the Company has, as of the date of this certification,
         fulfilled its obligations under this Agreement; and

                  (d) I have disclosed to [the Depositor] [the Trustee] [the
         Master Servicer] all significant deficiencies relating to the Company'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 standard as set forth in the
         Agreement.


         Date:
                                                --------------------------------
                                                [Signature]
                                                [Title]




<PAGE>


                                    EXHIBIT C



                                    DATA FILE