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                        FINANCIAL ASSET SECURITIES CORP.,
                                    Depositor


                               THE PROVIDENT BANK
                                    Servicer


                                       and


                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                     Trustee




                         POOLING AND SERVICING AGREEMENT

                          Dated as of December 1, 2003




                           ___________________________

                       Meritage Mortgage Loan Trust 2003-1

                    Asset-Backed Certificates, Series 2003-1



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<PAGE>



<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page
<S>                                                                                                            <C>

                                                     ARTICLE I

                                                    DEFINITIONS

SECTION 1.01.     Defined Terms...................................................................................9
SECTION 1.02.     Accounting.....................................................................................55
SECTION 1.03.     Allocation of Certain Interest Shortfalls......................................................55

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01.     Conveyance of Mortgage Loans...................................................................57
SECTION 2.02.     Acceptance by Trustee..........................................................................60
SECTION 2.03.     Repurchase or Substitution of Mortgage Loans by the Seller.....................................61
SECTION 2.04.     Intentionally Omitted..........................................................................64
SECTION 2.05.     Representations, Warranties and Covenants of the Servicer......................................64
SECTION 2.06.     Representations and Warranties of the Depositor................................................66
SECTION 2.07.     Issuance of Certificates.......................................................................68
SECTION 2.08.     [Reserved].....................................................................................68
SECTION 2.09.     Acceptance of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5,
                  REMIC 6 and REMIC 7 by the Trustee; Conveyance of REMIC 1
                  Regular Interests, REMIC 2 Regular Interests; Class M-3
                  Interest, Class M-4 Interest, Class M-5 Interest and Class C
                  Interest; Issuance
                  of Certificates................................................................................68

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

SECTION 3.01.     Servicer to Act as Servicer....................................................................71
SECTION 3.02.     Sub-Servicing Agreements Between Servicer and Sub-Servicers....................................72
SECTION 3.03.     Successor Sub-Servicers........................................................................74
SECTION 3.04.     Liability of the Servicer......................................................................74
SECTION 3.05.     No Contractual Relationship Between Sub-Servicers and the Trustee
                  or Certificateholders..........................................................................74
SECTION 3.06.     Assumption or Termination of Sub-Servicing Agreements by
                  Trustee........................................................................................75
SECTION 3.07.     Collection of Certain Mortgage Loan Payments...................................................75


                                                         i

<PAGE>



SECTION 3.08.     Sub-Servicing Accounts.........................................................................76
SECTION 3.09.     Collection of Taxes, Assessments and Similar Items; Servicing
                  Accounts.......................................................................................76
SECTION 3.10.     Collection Account and Distribution Account....................................................77
SECTION 3.11.     Withdrawals from the Collection Account and Distribution
                           Account...............................................................................79
SECTION 3.12.     Investment of Funds in the Collection Account and the Distribution
                  Account........................................................................................81
SECTION 3.13.     [Reserved].....................................................................................83
SECTION 3.14.     Maintenance of Hazard Insurance and Errors and Omissions and
                  Fidelity Coverage..............................................................................83
SECTION 3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................84
SECTION 3.16.     Realization Upon Defaulted Mortgage Loans......................................................85
SECTION 3.17.     Trustee to Cooperate; Release of Mortgage Files................................................87
SECTION 3.18.     Servicing Compensation.........................................................................89
SECTION 3.19.     Reports to the Trustee; Collection Account Statements..........................................89
SECTION 3.20.     Statement as to Compliance.....................................................................89
SECTION 3.21.     Independent Public Accountants' Servicing Report...............................................90
SECTION 3.22.     Access to Certain Documentation; Filing of Reports by Trustee..................................90
SECTION 3.23.     Title, Management and Disposition of REO Property..............................................92
SECTION 3.24.     Obligations of the Servicer in Respect of Prepayment Interest
                  Shortfalls.....................................................................................95
SECTION 3.25.     [Reserved].....................................................................................96
SECTION 3.26.     Obligations of the Servicer in Respect of Mortgage Rates and
                  Monthly Payments...............................................................................96
SECTION 3.27.     Solicitations..................................................................................96
SECTION 3.28.     Net WAC Rate Carryover Reserve Account.........................................................96
SECTION 3.29.     Advance Facility...............................................................................98

                                                    ARTICLE IV

                                                   FLOW OF FUNDS

SECTION 4.01.     Distributions.................................................................................102
SECTION 4.02.     Reserved......................................................................................106
SECTION 4.03.     Statements....................................................................................106
SECTION 4.04.     Remittance Reports; Advances..................................................................108
SECTION 4.05.     [Reserved]....................................................................................110
SECTION 4.06.     [Reserved]....................................................................................110
SECTION 4.07.     Distributions on the REMIC Regular Interests..................................................110
SECTION 4.08.     Allocation of Realized Losses.................................................................112

                                                     ARTICLE V

                                                 THE CERTIFICATES



                                                        ii

<PAGE>



SECTION 5.01.     The Certificates..............................................................................114
SECTION 5.02.     Registration of Transfer and Exchange of Certificates.........................................114
SECTION 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.............................................119
SECTION 5.04.     Persons Deemed Owners.........................................................................120
SECTION 5.05.     Appointment of Paying Agent...................................................................120

                                                    ARTICLE VI

                                          THE SERVICER AND THE DEPOSITOR

SECTION 6.01.     Liability of the Servicer and the Depositor...................................................121
SECTION 6.02.     Merger or Consolidation of, or Assumption of the Obligations of, the
                  Servicer or the Depositor.....................................................................121
SECTION 6.03.     Limitation on Liability of the Servicer and Others............................................121
SECTION 6.04.     Servicer Not to Resign........................................................................122
SECTION 6.05.     Delegation of Duties..........................................................................123
SECTION 6.06.     Reserved......................................................................................123
SECTION 6.07.     Inspection....................................................................................123

                                                    ARTICLE VII

                                                      DEFAULT

SECTION 7.01.     Servicer Events of Termination................................................................124
SECTION 7.02.     Trustee to Act; Appointment of Successor......................................................125
SECTION 7.03.     Waiver of Defaults............................................................................127
SECTION 7.04.     Notification to Certificateholders............................................................127
SECTION 7.05.     Survivability of Servicer Liabilities.........................................................127

                                                   ARTICLE VIII

                                                    THE TRUSTEE

SECTION 8.01.     Duties of Trustee.............................................................................128
SECTION 8.02.     Certain Matters Affecting the Trustee.........................................................129
SECTION 8.03.     Trustee Not Liable for Certificates or Mortgage Loans.........................................130
SECTION 8.04.     Trustee May Own Certificates..................................................................131
SECTION 8.05.     Trustee Fee and Expenses......................................................................131
SECTION 8.06.     Eligibility Requirements for Trustee..........................................................132
SECTION 8.07.     Resignation or Removal of Trustee.............................................................132
SECTION 8.08.     Successor Trustee.............................................................................133
SECTION 8.09.     Merger or Consolidation of Trustee............................................................134
SECTION 8.10.     Appointment of Co-Trustee or Separate Trustee.................................................134
SECTION 8.11.     Limitation of Liability.......................................................................135
SECTION 8.12.     Trustee May Enforce Claims Without Possession of Certificates.................................135
SECTION 8.13.     Suits for Enforcement.........................................................................136


                                                        iii

<PAGE>



SECTION 8.14.     Waiver of Bond Requirement....................................................................136
SECTION 8.15.     Waiver of Inventory, Accounting and Appraisal Requirement.....................................136

                                                    ARTICLE IX

                                               REMIC ADMINISTRATION

SECTION 9.01.     REMIC Administration..........................................................................137
SECTION 9.02.     Prohibited Transactions and Activities........................................................139
SECTION 9.03.     Indemnification with Respect to Certain Taxes and Loss of REMIC
                  Status........................................................................................139

                                                     ARTICLE X

                                                    TERMINATION

SECTION 10.01.             Termination..........................................................................141
SECTION 10.02.             Additional Termination Requirements..................................................143

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS

SECTION 11.01.             Amendment............................................................................144
SECTION 11.02.             Recordation of Agreement; Counterparts...............................................145
SECTION 11.03.             Limitation on Rights of Certificateholders...........................................145
SECTION 11.04.             Governing Law; Jurisdiction..........................................................146
SECTION 11.05.             Notices..............................................................................146
SECTION 11.06.             Severability of Provisions...........................................................147
SECTION 11.07.             Article and Section References.......................................................147
SECTION 11.08.             Notice to the Rating Agencies........................................................147
SECTION 11.09.             Further Assurances...................................................................148
SECTION 11.10.             Benefits of Agreement................................................................148
SECTION 11.11              Acts of Certificateholders...........................................................148
</TABLE>



                                                        iv

<PAGE>



Exhibits:
--------

Exhibit A-1       Form of Class I-A1 Certificates
Exhibit A-2       Form of Class II-A2 Certificates
Exhibit A-3       Form of Class M-1 Certificates
Exhibit A-4       Form of Class M-2 Certificates
Exhibit A-5       Form of Class M-3 Certificates
Exhibit A-6       Form of Class M-4 Certificates
Exhibit A-7       Form of Class M-5 Certificates
Exhibit A-8       Form of Class M-6 Certificates
Exhibit A-9       Form of Class M-7 Certificates
Exhibit A-10      Form of Class C Certificates
Exhibit A-11      Form of Class P Certificates
Exhibit A-12      Form of Class R Certificates
Exhibit B         [Reserved]
Exhibit C         Form of Mortgage Loan Purchase Agreement
Exhibit D         Mortgage Loan Schedule
Exhibit E         Request for Release
Exhibit F-1       Form of Trustee's Initial Certification
Exhibit F-2       Form of Trustee's Final Certification
Exhibit F-3       Form of Receipt of Mortgage Note
Exhibit G         [Reserved]
Exhibit H         Form of Lost Note Affidavit
Exhibit I         Form of Limited Power of Attorney
Exhibit J         Form of Investment Letter
Exhibit K         Form of Transfer Affidavit for Residual Certificates
Exhibit L         Form of Transferor Certificate
Exhibit M         Form of ERISA Representation Letter
Exhibit N-1       Form of Depositor's Certification
Exhibit N-2       Form of Trustee's Certification
Exhibit N-3       Form of Servicer's Certification
Exhibit O         Form of Statement as to Compliance
Exhibit P         Form of Cap Contract

Schedule I        Prepayment Charge Schedule




                                        v

<PAGE>



                  This Pooling and Servicing Agreement is dated as of December
1, 2003 (the "Agreement"), among FINANCIAL ASSET SECURITIES CORP., as depositor
(the "Depositor"), THE PROVIDENT BANK, as servicer (the "Servicer") and DEUTSCHE
BANK NATIONAL TRUST COMPANY, as trustee (the "Trustee").

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of twelve
classes of certificates, designated as (i) the Class I-A1 Certificates, (ii) the
Class II-A2 Certificates, (iii) the Class M-1 Certificates, (iv) the Class M-2
Certificates, (v) the Class M-3 Certificates, (vi) the Class M-4 Certificates,
(vii) the Class M-5 Certificates, (viii) the Class M-6 Certificates, (ix) the
Class M-7 Certificates, (x) the Class C Certificates, (xi) the Class P
Certificates and (xii) the Class R Certificates.

                                     REMIC 1
                                     -------

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



<TABLE>
<CAPTION>
                                Uncertificated REMIC 2          Initial Uncertificated             Assumed Final
        Designation                Pass-Through Rate               Principal Balance              Maturity Date(1)
        -----------                -----------------               -----------------              ----------------
<S>                                   <C>                          <C>                             <C>
           LTAA                       Variable(2)                  $ 292,046,508.39                November 2033
           LTA1                       Variable(2)                   $ 2,048,130.00                 November 2033
           LTA2                       Variable(2)                    $ 268,830.00                  November 2033
           LTM1                       Variable(2)                    $ 201,150.00                  November 2033
           LTM2                       Variable(2)                    $ 163,900.00                  November 2033
           LTM3                       Variable(2)                     $ 52,150.00                  November 2033
           LTM4                       Variable(2)                     $ 44,700.00                  November 2033
           LTM5                       Variable(2)                     $ 44,700.00                  November 2033
           LTM6                       Variable(2)                     $ 52,150.00                  November 2033
           LTM7                       Variable(2)                     $ 29,800.00                  November 2033
           LTZZ                       Variable(2)                   $ 3,054,622.82                 November 2033
            LTP                       Variable(2)                      $ 100.00                    November 2033
</TABLE>
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date in the month immediately following the
     maturity date for the Mortgage Loan with the latest possible maturity date
     has been designated as the "latest possible maturity date" for each REMIC 1
     Regular Interest.
(2)  Calculated in accordance with the definition of "Uncertificated REMIC 1
     Pass-Through Rate" herein.




<PAGE>



                                     REMIC 2
                                     -------

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

                  The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for each Class of Certificates and REMIC 2 Regular Interest that represents one
or more of the "regular interests" in REMIC 2 created hereunder:




<TABLE>
<CAPTION>
                                Original Class Certificate                                         Assumed Final
     Class Designation               Principal Balance               Pass-Through Rate            Maturity Date(1)
     -----------------               -----------------               -----------------            ----------------
<S>                                  <C>                                <C>                        <C>
Class I-A1.................          $ 204,813,000.00                   Variable(2)                November 2033
Class II-A2................           $ 26,883,000.00                   Variable(2)                November 2033
Class M-1..................           $ 20,115,000.00                   Variable(2)                November 2033
Class M-2..................           $ 16,390,000.00                   Variable(2)                November 2033
Class M-3..................           $ 5,215,000.00                    Variable(2)                November 2033
Class M-4..................           $ 4,470,000.00                    Variable(2)                November 2033
Class M-5..................           $ 4,470,000.00                    Variable(2)                November 2033
Class M-6..................           $ 5,215,000.00                    Variable(2)                November 2033
Class M-7..................           $ 2,980,000.00                    Variable(2)                November 2033
Class C....................          $ 7,455,641.21(3)                  Variable(2)                November 2033
Class P....................              $ 100.00                          N/A(4)                  November 2033
</TABLE>
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date in the month immediately following the
     maturity date for the Mortgage Loan with the latest maturity date has been
     designated as the "latest possible maturity date" for each Class of
     Certificates.
(2)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3)  The Class C Certificates will accrue interest at its variable Pass-Through
     Rate on the Notional Amount of the Class C Interest outstanding from time
     to time which shall equal the aggregate of the Uncertificated Principal
     Balances of the REMIC 1 Regular Interests. The Class C Certificates will
     not accrue interest on its Class Certificate Principal Balance.
(4)  The Class P Certificates will not accrue interest.


                                        2

<PAGE>



                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Defined Terms.

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

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

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

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

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

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

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

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


                                        3

<PAGE>



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

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

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

                  "Advance Financing Person": As defined in Section 3.29 hereof.

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

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

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

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

                  "Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining undistributed from the previous Distribution Date.

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

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

                  "Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the related
Monthly Payments received on the Mortgage Loans on or prior to the related
Determination Date, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments, proceeds from repurchases of and substitutions for such Mortgage
Loans and other unscheduled recoveries of principal and interest in respect of
the Mortgage Loans received during the related Prepayment Period, (c) the
aggregate of any amounts received in respect of a related REO Property withdrawn
from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Servicer in respect of related Prepayment Interest Shortfalls for
such Distribution Date, (e) the aggregate of any Advances made by the Servicer
for such Distribution Date in respect of the Mortgage Loans, (f) the aggregate
of any related advances made by the Trustee in respect of the Mortgage Loans for
such Distribution Date pursuant to Section 7.02 and (g) the amount of any


                                        4

<PAGE>



Prepayment Charges collected by the Servicer in connection with the full or
partial prepayment of any of the Mortgage Loans and any Servicer Prepayment
Charge Payment Amount over (ii) the sum of (a) amounts reimbursable or payable
to the Servicer pursuant to Section 3.11(a) or the Trustee pursuant to Section
3.11(b), (b) amounts deposited in the Collection Account or the Distribution
Account pursuant to clauses (a) through (g) above, as the case may be, in error,
(c) the amount of any Prepayment Charges collected by the Servicer in connection
with the full or partial prepayment of any of the Mortgage Loans and any
Servicer Prepayment Charge Payment Amount, (d) the Trustee Fee payable from the
Distribution Account pursuant to Section 8.05 and (e) any indemnification
payments or expense reimbursements made by the Trust Fund pursuant to Section
8.05.

                  "Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.

                  "Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment at the maturity of such Mortgage
Loan that is substantially greater than the preceding Monthly Payment.

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

                  "Book-Entry Certificates": Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A Certificates and the Mezzanine Certificates shall be
Book-Entry Certificates.

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

                  "Cap Amount": With respect to the Class A Certificates and the
Mezzanine Certificates an amount equal to (i) the aggregate amount received by
the Trust from the Cap Contract multiplied by (ii) a fraction equal to (a) the
Certificate Principal Balance of such Class immediately prior to the applicable
Distribution Date divided by (b) the aggregate Certificate Principal Balance of
the Class A Certificates and the Mezzanine Certificates immediately prior to the
applicable Distribution Date.

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

                  "Certificate": Any Regular Certificate or Residual
Certificate.



                                        5

<PAGE>



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

                  "Certificate Margin": With respect to the Class I-A1
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 0.370% per annum and (B) after the Optional Termination Date,
0.740% per annum. With respect to the Class II-A2 Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 0.420% per
annum and (B) after the Optional Termination Date, 0.840% per annum. With
respect to the Class M-1 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 0.700% per annum and (B) after the Optional
Termination Date, 1.050% per annum. With respect to the Class M-2 Certificates
on each Distribution Date (A) on or prior to the Optional Termination Date,
1.550% per annum and (B) after the Optional Termination Date, 2.325% per annum.
With respect to the Class M-3 Certificates on each Distribution Date (A) on or
prior to the Optional Termination Date, 1.800% per annum and (B) after the
Optional Termination Date, 2.700% per annum. With respect to the Class M-4
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 2.000% per annum and (B) after the Optional Termination Date,
3.000% per annum. With respect to the Class M-5 Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 2.500% per
annum and (B) after the Optional Termination Date, 3.750% per annum. With
respect to the Class M-6 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 3.000% per annum and (B) after the Optional
Termination Date, 4.500% per annum. With respect to the Class M-7 Certificates
on each Distribution Date (A) on or prior to the Optional Termination Date,
3.000% per annum and (B) after the Optional Termination Date, 4.500% per annum.

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

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


                                        6

<PAGE>



Principal Balances of the Class A Certificates, the Mezzanine Certificates and
the Class P Certificates then outstanding.

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

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

                  "Class A Certificate": Any of the Class I-A1 Certificates or
the Class II-A2 Certificates.

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Class I-A1 Principal Distribution Amount
and (ii) the Class II-A2 Principal Distribution Amount.

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

                  "Class I-A1 Certificates": Any one of the Class I-A1
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-1,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 2.

                   "Class I-A1 Principal Distribution Amount": The excess of (x)
the Certificate Principal Balance of the Class I-A1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
55.50% and (ii) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.

                  "Class II-A2 Certificates": Any one of the Class II-A2
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 2.

                   "Class II-A2 Principal Distribution Amount": The excess of
(x) the Certificate Principal Balance of the Class II-A2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 55.50% and (ii) the aggregate Stated Principal Balance of the


                                        7

<PAGE>



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

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.

                  "Class M-1 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 69.00% and
(ii) the Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.

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

                  "Class M-2 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 80.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.



                                        8

<PAGE>



                  "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.

                  "Class M-3 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 83.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.

                  "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.

                  "Class M-4 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 86.50% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.



                                        9

<PAGE>



                  "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.

                  "Class M-5 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (vi) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 89.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.

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

                  "Class M-6 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) and (vii) the Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 93.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of


                                       10

<PAGE>



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

                  "Class M-7 Certificate": Any one of the Class M-7 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-9, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.

                  "Class M-7 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date) and (viii) the Certificate
Principal Balance of the Class M-7 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 95.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.

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

                  "Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-12 and evidencing the
ownership of the Class R-1 Interest and the Class R-2 Interest.


                                       11

<PAGE>



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

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

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

                  "Closing Date": December 30, 2003.

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

                  "Collection Account": The account or accounts created and
maintained by the Servicer pursuant to Section 3.10(a), which shall be entitled
"Deutsche Bank National Trust Company, as Trustee, in trust for registered
Holders of Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1," which must be an Eligible Account.

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

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 1761 East St. Andrew Place,
Santa Ana, CA 92705-4934, Attn: Trust Administration--GC03M1, or at such other
address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Servicer, the Originator and the Seller.

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


        REMIC 1 REGULAR INTEREST                  Regular Certificate
        ------------------------                  -------------------
                  LTA1                                 Class I-A1
                  LTA2                                Class II-A2
                  LTM1                                 Class M-1
                  LTM2                                 Class M-2
                  LTM3                                 Class M-3
                  LTM4                                 Class M-4
                  LTM5                                 Class M-5
                  LTM6                                 Class M-6
                  LTM7                                 Class M-7
                  LTP                                   Class P

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


                                       12

<PAGE>



                  "Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

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

                  "Cut-off Date": With respect to each Mortgage Loan, the later
of (i) the date of origination of such Mortgage Loan or (ii) the Close of
Business on December 1, 2003.

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

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

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

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

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

                  "Delinquency Percentage": For any Distribution Date, the sum
of the percentages obtained by dividing (x) the aggregate Stated Principal
Balance of Mortgage Loans that are Delinquent 60 days or more, that are in
foreclosure or that have been converted to REO Properties by (y) the aggregate
Stated Principal Balance of the Mortgage Loans, in each case, as of the last day
of the previous three calendar months divided by 3.

                  "Delinquent": With respect to any Mortgage Loan and related
Monthly Payment, the Monthly Payment due on a Due Date which is not made by the
Close of Business on the next scheduled Due Date for such Mortgage Loan. For
example, a Mortgage Loan is 60 or more days Delinquent if the Monthly Payment
due on a Due Date is not made by the Close of Business on the second scheduled
Due Date after such Due Date.

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



                                       13

<PAGE>



                  "Depository": The initial Depository shall be The Depository
Trust Company, whose nominee is Cede & Co., or any other organization registered
as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York. Upon request, the Depository may also be Clearstream
Banking Luxembourg and the Euroclear System.

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

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

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

                  "Disqualified Organization": A "disqualified organization"
under Section 860E of the Code, which as of the Closing Date is any of: (i) the
United States, any state or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (ii) any organization (other than a cooperative described
in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by Section 511
of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the
Code or (iv) an "electing large partnership" within the meaning of Section 775
of the Code. A corporation will not be treated as an instrumentality of the
United States or of any state or political subdivision thereof, if all of its
activities are subject to tax and, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "state" and
"international organizations" shall have the meanings set forth in Section 7701
of the Code.

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, Deutsche Bank National Trust Company, as
Trustee, in trust for the registered Certificateholders of Meritage Mortgage
Loan Trust 2003-1, Asset-Backed Certificates, Series 2003-1" and which must be
an Eligible Account.



                                       14

<PAGE>



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

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

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

                  "Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated A-1 by S&P, F-1 by Fitch and P-1 by Moody's (or comparable
ratings if S&P, Fitch and Moody's are not the Rating Agencies) at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders will have a claim with respect to the
funds in such account or a perfected first priority security interest against
such collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.

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

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

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

                  "Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Monthly Interest Distributable Amount
payable on the Class C Certificates on such


                                       15

<PAGE>



Distribution Date as reduced by Realized Losses allocated thereto with respect
to such Distribution Date pursuant to Section 4.08 and (y) the
Overcollateralization Deficiency Amount for such Distribution Date.

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

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

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

                  "Fitch": Fitch Ratings, or its successor in interest.

                  "Fixed-Rate Mortgage Loan": A first or second lien Mortgage
Loan which provides for a fixed Mortgage Rate payable with respect thereto.

                  "Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, the lesser of (i) LIBOR plus the
related Certificate Margin and (ii) the Maximum Cap Rate.

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

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

                  "Group I Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group I Principal Remittance Amount for such Distribution Date,
and the denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.

                  "Group I Basic Principal Distribution Amount": With respect to
any Distribution Date, the excess of (i) the Group I Principal Remittance Amount
for such Distribution Date over (ii) the product of (a) the
Overcollateralization Release Amount, if any, for such Distribution Date and (b)
the Group I Allocation Percentage.

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


                                       16

<PAGE>



                  "Group I Mortgage Loan": A Mortgage Loan assigned to Loan
Group I with a Stated Principal Balance at origination that conforms to Fannie
Mae and Freddie Mac loan limits.

                  "Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution
Amount for such Distribution Date and (ii) the product of (a) the Extra
Principal Distribution Amount for such Distribution Date and (b) the Group I
Allocation Percentage.

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

                  "Group II Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group II Principal Remittance Amount for such Distribution
Date, and the denominator of which is (ii) the Principal Remittance Amount for
such Distribution Date.

                  "Group II Basic Principal Distribution Amount": With respect
to any Distribution Date, the excess of (i) the Group II Principal Remittance
Amount for such Distribution Date over (ii) the product of (a) the
Overcollateralization Release Amount, if any, for such Distribution Date and (b)
the Group II Allocation Percentage.

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

                  "Group II Mortgage Loan": A Mortgage Loan assigned to Loan
Group II with a Stated Principal Balance at origination that may or may not
conform to Fannie Mae and Freddie Mac loan limits.

                  "Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii) the product of (a) the Extra
Principal Distribution Amount for such Distribution Date and (b) the Group II
Allocation Percentage.



                                       17

<PAGE>



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

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

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

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

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



                                       18

<PAGE>



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

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

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

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

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

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

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

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


                                       19

<PAGE>



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

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

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

                  "Loan Group": Either Loan Group I or Loan Group II, as the
context requires.

                  "Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as the Group I Mortgage Loans.

                  "Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as the Group II Mortgage Loans.

                  "Losses":  As defined in Section 9.03.

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

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

                  "Marker Rate": With respect to the Class C Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 1 Pass- Through Rates for each REMIC 1
Regular Interest (other than REMIC 1 Regular Interest LTAA and REMIC 1 Regular
Interest LTP), with the rate on each such REMIC 1 Regular Interest (other than
REMIC 1 Regular Interest LTZZ) subject to a cap equal to the lesser of (i) LIBOR
plus the related Certificate Margin and (ii) the Net WAC Rate for the purpose of
this calculation; and with the rate on REMIC 1 Regular Interest LTZZ subject to
a cap of zero for the purpose of this calculation;


                                       20

<PAGE>



provided, however, that for this purpose, calculations of the Uncertificated
REMIC 1 Pass-Through Rate and the related caps with respect to REMIC 1 Regular
Interest LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest LTM1,
REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1 Regular
Interest LTM4, REMIC 1 Regular Interest LTM5, REMIC 1 Regular Interest LTM6 and
REMIC 1 Regular Interest LTM7 shall be multiplied by a fraction, the numerator
of which is 30 and the denominator of which is the actual number of days elapsed
in the related Accrual Period.

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

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

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

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

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

                  "Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M- 3 Certificate, Class M-4 Certificate, Class M-5
Certificate, Class M-6 Certificate and Class M-7 Certificates.

                  "MIN": The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.



                                       21

<PAGE>



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

                  "MOM Loan": MERS acting as the mortgagee of such Mortgage
Loan, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns, at the origination thereof.

                  "Monthly Interest Distributable Amount": With respect to the
Class A Certificates, the Mezzanine Certificates and the Class C Certificates
and any Distribution Date, the amount of interest accrued during the related
Accrual Period at the related Pass-Through Rate on the Certificate Principal
Balance (or Notional Amount in the case of the Class C Certificates) of such
Class immediately prior to such Distribution Date, in each case, reduced by any
Net Prepayment Interest Shortfalls, Relief Act Interest Shortfalls or other
shortfalls allocated to such Certificate as provided in Section 1.03.

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.07; and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.

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

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

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

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

                  "Mortgage Loan Purchase Agreement": The agreement among the
Originator, the Seller and the Depositor, regarding the transfer of the Mortgage
Loans by the Seller to or at the direction of the Depositor, substantially in
the form attached hereto as Exhibit C.

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


                                       22

<PAGE>

                  (1) the Mortgage Loan identifying number;

                  (2) [reserved];

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

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

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

                  (6) the original months to maturity;

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

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

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

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

                  (11) the stated maturity date;

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

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

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

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

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

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

                  (18) the Mortgage Rate at origination;

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

                  (20) the risk grade;


                                       23

<PAGE>



                  (21) the Value of the Mortgaged Property;

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

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

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

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

                  (26) the program code.

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

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

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

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



                                       24

<PAGE>



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

                  "Mortgagor":  The obligor on a Mortgage Note.

                  "Net Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan or any other disposition of related Mortgaged Property (including
REO Property) the related Liquidation Proceeds and Insurance Proceeds net of
Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.

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

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

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

                  "Net WAC Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, a per annum rate equal to the
product of (x) the weighted average of the Adjusted Net Mortgage Rates of the
Mortgage Loans, weighted on the basis of the outstanding Stated Principal
Balances of the Mortgage Loans as of the first day of the month preceding the
month of such Distribution Date and (y) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days elapsed in the related
Accrual Period. For federal income tax purposes, the equivalent of the foregoing
shall be expressed as a per annum rate equal to the weighted average of the
Uncertificated REMIC 1 Pass-Through Rates on the REMIC 1 Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
1 Regular Interest.

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


                                       25

<PAGE>



                  "Net WAC Rate Carryover Reserve Account": The account
established and maintained pursuant to Section 3.28.

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

                  "Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Servicer, will not be
ultimately recoverable from Late Collections, Insurance Proceeds, Liquidation
Proceeds or condemnation proceeds on such Mortgage Loan or REO Property as
provided herein.

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

                  "Offered Certificates": The Class A Certificates and the
Mezzanine Certificates offered to the public pursuant to the Prospectus
Supplement.

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

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

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

                  "Original Class Certificate Principal Balance": With respect
to the Class A Certificates, the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Interest, the Class M-3 Certificates, the Class M-4
Interest, the Class M-4 Certificates, the Class M-5 Interest, the Class M-5
Certificates, the Class M-6 Interest, the Class M-6 Certificates, the Class M-7
Interest, the Class M-7 Certificates, the Class C Interest, the Class C
Certificates, the Class P Interest and the Class P Certificates the
corresponding amounts set forth opposite such Class above in the Preliminary
Statement.

                  "Original Group I Mortgage Loan": Any of the Group I Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate Stated
Principal Balance of the Original Group I Mortgage Loans as of the Cut-off Date
is equal to $263,430,629.85.



                                       26

<PAGE>



                  "Original Group II Mortgage Loan": Any of the Group II
Mortgage Loans included in the Trust Fund as of the Closing Date. The aggregate
Stated Principal Balance of the Original Group II Mortgage Loans as of the
Cut-off Date is equal to $34,576,111.36.

                  "Original Mortgage Loan": Any of the Original Group I Mortgage
Loans or Original Group II Mortgage Loans included in the Trust Fund as of the
Closing Date.

                  "Original Notional Amount": With respect to the Class C
Certificates, $298,006,741.21 .

                  "Originator": Meritage Mortgage Corporation, an Oregon
corporation, or its successor in interest.

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

                  "Overcollateralization Floor": With respect to the Class I-A1
Certificates, $1,317,153.15. With respect to the Class II-A2 Certificates,
$172,880.56. With respect to the Mezzanine Certificates, $1,490,033.71.

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

                  "Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, 2.50% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date (2.65% if an
Overcollateralization Step Up Event has occurred), (ii) on or after the Stepdown
Date provided a Trigger Event is not in effect, the greater of (x) 5.00% (5.30%
if an Overcollateralization Step Up Event has occurred) of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (y)
$1,490,033.71 or (iii) on or after the Stepdown Date and if a Trigger Event is
in effect, the Overcollateralization Target Amount for the immediately preceding
Distribution Date.

                  "Overcollateralization Step Up Event": With respect to any
Distribution Date on or after the Distribution Date in January 2006 if, after
giving effect to distributions on the Certificates other than distributions
under section 4.01(d), the Net Monthly Excess Cashflow as a percentage of the
aggregate Principal Balance of the Mortgage Loans as of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) is less than the
product of (x) 25% and (y) the aggregate Principal Balance of Mortgage Loans
Delinquent 60 days or more, that are in foreclosure or that are REO Properties,
as of the last day of the previous six calendar months divided by 6.


                                       27

<PAGE>



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

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

                  "Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates and any Distribution Date, the lesser of (x) the
related Formula Rate for such Distribution Date and (y) the Net WAC Rate for
such Distribution Date.

                  With respect to the Class C Interest and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (L) below, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of the REMIC 1 Regular Interests. For purposes
of calculating the Pass-Through Rate for the Class C Interest the numerator is
equal to the sum of the following components:

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

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

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

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

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



                                       28

<PAGE>



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

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

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

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

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

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

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

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

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

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

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

                  "Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued or managed by the


                                       29

<PAGE>



Depositor, the Servicer, the Trustee or any of their respective Affiliates or
for which an Affiliate of the Trustee serves as an advisor:

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

                  (ii) (A) demand and time deposits in, certificates of deposit
         of, bankers' acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee or its
         agent acting in their respective commercial capacities) incorporated
         under the laws of the United States of America or any state thereof and
         subject to supervision and examination by federal and/or state
         authorities, so long as, at the time of such investment or contractual
         commitment providing for such investment, such depository institution
         or trust company (or, if the only Rating Agency is S&P, in the case of
         the principal depository institution in a depository institution
         holding company, debt obligations of the depository institution holding
         company) or its ultimate parent has a short-term uninsured debt rating
         in one of the two highest available ratings of Moody's and the highest
         available rating category of S&P and Fitch and provided that each such
         investment has an original maturity of no more than 365 days; and
         provided further that, if the only Rating Agency is S&P and if the
         depository or trust company is a principal subsidiary of a bank holding
         company and the debt obligations of such subsidiary are not separately
         rated, the applicable rating shall be that of the bank holding company;
         and, provided further that, if the original maturity of such short-
         term obligations of a domestic branch of a foreign depository
         institution or trust company shall exceed 30 days, the short-term
         rating of such institution shall be A-1+ in the case of S&P if S&P is
         the Rating Agency; and (B) any other demand or time deposit or deposit
         which is fully insured by the FDIC;

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

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

                  (v) commercial paper (including both non-interest-bearing
         discount obligations and interest-bearing obligations payable on demand
         or on a specified date not more than 30


                                       30

<PAGE>



         days after the date of acquisition thereof) that is rated by S&P (and
         if rated by any other Rating Agency, also by such other Rating Agency)
         in its highest short-term unsecured debt rating available at the time
         of such investment;

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

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

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

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

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

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

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

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

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

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges on the Mortgage Loans included in the Trust Fund on such
date, attached hereto as Schedule I (including the prepayment charge summary
attached thereto). The Prepayment Charge Schedule shall set forth the following
information with respect to each Prepayment Charge:

                  (i) the Mortgage Loan identifying number;


                                       31

<PAGE>




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

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

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

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

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

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
from the first day of the related Prepayment Period through the last day of the
calendar month preceding the month in which such Distribution Date occurs, an
amount equal to one month's interest on the Mortgage Loan less any payments in
respect of interest for such month made by the Mortgagor.

                  "Prepayment Period": With respect to any Distribution Date,
the period commencing on the first day of the calendar month preceding the
related Distribution Date and ending on the last day of the calendar month
preceding such Distribution Date.

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

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

                  "Principal Remittance Amount": With respect to any
Distribution Date, the sum of the Group I Principal Remittance Amount and the
Group II Principal Remittance Amount.

                  "Prospectus Supplement": That certain Prospectus Supplement
dated December 23, 2003 relating to the public offering of the Class A
Certificates and the Mezzanine Certificates.

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03 or
10.01, and as confirmed by a certificate of a Servicing Officer to the Trustee,
an amount equal to the sum of (i) 100% of the Stated Principal


                                       32

<PAGE>



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

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

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
or the Mortgage Loan Purchase Agreement which must, on the date of such
substitution, (i) have an outstanding principal balance (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), after application of all scheduled payments of
principal and interest due during or prior to the month of substitution, not in
excess of, and not more than 5% less than, the outstanding principal balance of
the Deleted Mortgage Loan as of the Due Date in the calendar month during which
the substitution occurs, (ii) have a Mortgage Rate not less than (and not more
than one percentage point in excess of) the Mortgage Rate of the Deleted
Mortgage Loan, (iii) if the Qualified Substitute Mortgage Loan is an
Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) if the Qualified
Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a Minimum
Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage
Loan, (v) if the Qualified Substitute Mortgage Loan is an Adjustable-Rate
Mortgage Loan, have a Gross Margin equal to or greater than the Gross Margin of
the Deleted Mortgage Loan, (vi) if the Qualified Substitute Mortgage Loan is an
Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two
months later than the next Adjustment Date on the Deleted Mortgage Loan, (vii)
[reserved], (viii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan, (ix) be current
as of the date of substitution, (x) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (xi) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan, (xii) have been


                                       33

<PAGE>



underwritten or reunderwritten by the Originator in accordance with the same
underwriting criteria and guidelines as the Deleted Mortgage Loan and (xiii)
conform to each representation and warranty set forth in Section 3.01 of the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the Mortgage Rates described in
clauses (ii) through (vi) hereof shall be satisfied for each such mortgage loan,
the risk gradings described in clause (x) hereof shall be satisfied as to each
such mortgage loan, the terms described in clause (viii) hereof shall be
determined on the basis of weighted average remaining term to maturity (provided
that no such mortgage loan may have a remaining term to maturity longer than the
Deleted Mortgage Loan), the Loan-to-Value Ratios described in clause (x) hereof
shall be satisfied as to each such mortgage loan and, except to the extent
otherwise provided in this sentence, the representations and warranties
described in clause (xiv) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.

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

                  "Realized Loss": With respect to any Liquidated Mortgage Loan,
the amount of loss realized equal to the portion of the Stated Principal Balance
remaining unpaid after application of all Net Liquidation Proceeds in respect of
such Mortgage Loan.

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

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

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



                                       34

<PAGE>



                  "Regular Certificate": Any of the Class A Certificates,
Mezzanine Certificates, Class C Certificates or Class P Certificates.

                  "Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.

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

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

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

                  "REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 1 Pass- Through Rate for REMIC 1
Regular Interest LTAA minus the Marker Rate, divided by (b) 12.

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

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



                                       35

<PAGE>



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

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

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

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

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

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


                                       36

<PAGE>



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

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

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

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

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

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

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



                                       37

<PAGE>



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

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

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

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

                  "Remittance Report": A report prepared by the Servicer and
delivered to the Trustee pursuant to Section 4.04.

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

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

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

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

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO


                                       38

<PAGE>



Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Servicer pursuant to
Section 3.23 for unpaid Servicing Fees in respect of the related Mortgage Loan
and unreimbursed Servicing Advances and Advances in respect of such REO Property
or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of
such REO Property for such calendar month.

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

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

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

                  "Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a Fannie Mae eligible condominium project,
(iv) a manufactured home, or (v) a detached one-family dwelling in a planned
unit development, none of which is a co-operative or mobile home.

                  "Residual Certificate":  The Class R Certificates.

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

                  "Responsible Officer": When used with respect to the Trustee,
any director, any vice president, any assistant vice president, the Secretary,
any assistant secretary, the Treasurer, any assistant treasurer or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and, with respect to a
particular matter, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.

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

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



                                       39

<PAGE>



                  "Servicer": The Provident Bank, an Ohio banking corporation,
or any successor servicer appointed as herein provided, in its capacity as
Servicer hereunder.

                  "Servicer's Assignee":  As defined in Section 3.29 hereof.

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

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

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

                  "Servicer Remittance Date": With respect to any Distribution
Date, the Business Day prior to such Distribution Date.

                  "Servicer Termination Test": With respect to any Distribution
Date, the Servicer Termination Test will be failed if the Cumulative Loss
Percentage the applicable percentages set forth below with respect to such
Distribution Date:


           Distribution Date                           Percentage
           -----------------                           ----------
     January 2007 to December 2007                        4.25%
     January 2008 to December 2008                        6.75%
     January 2009 to December 2009                        8.50%
      December 2010 and thereafter                        9.50%

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

                  "Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures related to a
Mortgage Loan, including any expenses incurred in relation to any such
proceedings that result from the Mortgage Loan being registered on the MERS(R)
System, (iii) the management and liquidation of the REO Property and (iv)
compliance with the obligations under Sections 3.01, 3.09, 3.14, 3.16, and 3.23.
The Servicer shall not be required to make any Servicing Advance that would be a
Nonrecoverable Advance.

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



                                       40

<PAGE>



                  "Servicing Fee Rate":  0.50% per annum.

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

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

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

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

                  "Stepdown Date": The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (ii) the later to occur of (x) the
Distribution Date occurring in January 2006 and (y) the first Distribution Date
on which the Credit Enhancement Percentage (calculated for this purpose only
after taking into


                                       41

<PAGE>



account payments of principal on the Mortgage Loans but prior to distribution of
the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount to the Certificates then entitled to distributions of
principal on such Distribution Date) is equal to or greater than 44.50%.

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

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

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

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

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

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

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

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

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

                  (a) the Delinquency Percentage exceeds 36.00% of the Credit
Enhancement Percentage or

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



     DISTRIBUTION DATE OCCURRING IN              PERCENTAGE
     ------------------------------              ----------

      January 2007 to December 2007                 3.75%
      January 2008 to December 2008                 6.00%



                                       42

<PAGE>




      January 2009 to December 2009                 7.75%
      December 2010 and thereafter                  8.50%

                  "Trust": Meritage Mortgage Loan Trust 2003-1, the trust
created hereunder.

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

                  "Trustee": Deutsche Bank National Trust Company, a national
banking association, or any successor trustee appointed as herein provided.

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee Fee Rate
(without regard to the words "per annum"), multiplied by (ii) the aggregate
Stated Principal Balance of the Mortgage Loans and any REO Properties (after
giving effect to scheduled payments of principal due during the Due Period
relating to the previous Distribution Date, to the extent received or advanced
and prepayments collected during the Prepayment Period relating to the previous
Distribution Date).

                  "Trustee Fee Rate": 0.0085% per annum.

                  "Unadjusted Net WAC 30/360 Rate": For any Distribution Date, a
per annum rate equal to the weighted average of the Adjusted Net Mortgage Rates
of the Mortgage Loans for such Distribution Date.

                  "Uncertificated Accrued Interest": With respect to each REMIC
1 Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance of such REMIC 1 Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Net Prepayment Interest
Shortfalls, Relief Act Interest Shortfalls or other shortfalls allocated to such
Certificate as provided in Section 1.03.

                  "Uncertificated Principal Balance": With respect to each REMIC
1 Regular Interest, the amount of such REMIC 1 Regular Interest outstanding as
of any date of determination. As of the Closing Date, the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest shall equal the amount
set forth in the Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated Principal
Balance of each such REMIC 1 Regular Interest shall be reduced by all
distributions of principal made on such REMIC 1 Regular Interest on such
Distribution Date pursuant to Section 4.07 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.08, and the Uncertificated Principal Balances of
REMIC 1 Regular Interest LTZZ shall be increased by interest deferrals as
provided in Section 4.07. With respect to the Class C Interest as of any date of
determination, an amount equal to the excess, if any, of (A) the then aggregate
Uncertificated Principal Balances of the REMIC 1 Regular Interests over (B) the
then aggregate


                                       43

<PAGE>



Certificate Principal Balances of the Class A Certificates, the Mezzanine
Certificates and the Class P Certificates then outstanding.

                  "Uncertificated REMIC 1 Pass-Through Rate": For any
Distribution Date and each REMIC 1 Regular Interest, the Unadjusted Net WAC
30/360 Rate of the Mortgage Loans for such Distribution Date.

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

                  "United States Person" or "U.S. Person": A citizen or resident
of the United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof, or the District of Columbia (except in the case of a partnership, to
the extent provided in Treasury regulations) provided that, for purposes solely
of the restrictions on the transfer of Residual Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.

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

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


                                       44

<PAGE>



Loan, such value of the Mortgaged Property is based solely upon the lesser of
(1) the value determined by an appraisal made for the Originator of such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by an appraiser who met the minimum requirements of Fannie Mae and Freddie
Mac and (2) the value thereof as determined by a review appraisal conducted by
the Originator in the event any such review appraisal determines an appraised
value ten percent or more lower than the value thereof as determined by the
appraisal referred to in clause (ii)(1) above.

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

                  SECTION 1.02. Accounting.

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

                  SECTION 1.03. Allocation of Certain Interest Shortfalls.

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



                                       45

<PAGE>



                  For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 1 Regular Interests for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC 1 Regular Interest LTAA and REMIC 1 Regular Interest LTZZ up to
an aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 1 Regular Interest LTAA, REMIC
1 Regular Interest LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest
LTM1, REMIC 1 Regular Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 1
Regular Interest LTM4, REMIC 1 Regular Interest LTM5, REMIC 1 Regular Interest
LTM6, REMIC 1 Regular Interest LTM7 and REMIC 1 Regular Interest LTZZ PRO RATA
based on, and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC 1 Regular Interest.



                                       46

<PAGE>



                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of Mortgage Loans.

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

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

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

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


                                       47

<PAGE>



                  (iii) unless the Mortgage Loan is registered on the MERS(R)
         System, an original Assignment, in form and substance acceptable for
         recording. The Mortgage shall be assigned either (A) in blank or (B) to
         "Deutsche Bank National Trust Company, as Trustee, without recourse";

                  (iv) an original copy of any intervening assignment of
         Mortgage showing a complete chain of assignments (or to MERS, if the
         Mortgage Loan is registered on the MERS(R) System and noting the
         presence of the MIN);

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

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

                  The Depositor herewith also delivers to the Trustee an
executed copy of the Mortgage Loan Purchase Agreement.

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

                  Upon discovery or receipt of notice of any document that on
its face does not conform to the requirements of Section 2.01 hereof, or that a
document is missing from, a Mortgage File, the Trustee (to the extent that the
Trustee has received written notice from the Servicer) shall enforce the
obligations of the Originator under the Mortgage Loan Purchase Agreement, as
applicable, to cure such defect or deliver such missing document to the Trustee
or the Custodian within 90 days. If the Originator does not cure such defect or
deliver such missing document within such time period, the Trustee (to the
extent that the Trustee has received written notice from the Servicer) shall
enforce the obligations of the Originator under the Mortgage Loan Purchase
Agreement to either repurchase or substitute for such Mortgage Loan in
accordance with Section 2.03. In connection


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<PAGE>



with the foregoing, it is understood and agreed that the Trustee shall have no
duty to discover any such defects except in the course of performing its review
of the Mortgage Files to the extent set forth herein nor shall the Trustee have
any liability in respect of such defect or failure by the Originator to deliver
any missing document within such period.

                  Except with respect to any Mortgage Loan for which MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as the mortgagee of record, the Trustee shall enforce the obligations of the
Originator under the Mortgage Loan Purchase Agreement to cause the Assignments
which were delivered in blank to be completed and to record all Assignments
referred to in Section 2.01(iii) hereof and, to the extent necessary, in Section
2.01(iv) hereof. The Trustee shall enforce the obligations of the Originator
under the Mortgage Loan Purchase Agreement to deliver such assignments for
recording within 180 days of the Closing Date. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, the
Trustee shall enforce the obligations of the Originator under the Mortgage Loan
Purchase Agreement to promptly have a substitute Assignment prepared or have
such defect cured, as the case may be, and thereafter cause each such Assignment
to be duly recorded.

                  In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Depositor further agrees that it will
cause, within 30 Business Days after the Closing Date, the MERS(R) System to
indicate that such Mortgage Loans have been assigned by the Depositor to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Servicer to, and the Servicer agrees that it
will not, alter the codes referenced in this paragraph with respect to any
Mortgage Loan during the term of this Agreement unless and until such Mortgage
Loan is repurchased in accordance with the terms of this Agreement.

                  In the event that any Mortgage Note is endorsed in blank as of
the Closing Date, promptly following the Closing Date, the Trustee shall cause
(at the Seller's expense) such endorsements to be completed in the following
form: "Pay to the order of Deutsche Bank National Trust Company, as Trustee,
without recourse."

                  The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 365 days of its submission for recordation. In the event that
the Servicer cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Servicer shall deliver to the
Custodian, within such 365 day period, a certificate of a Servicing Officer
which shall (A) identify the recorded document, (B) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused by
the public recording office, (C) state the amount of time generally required by


                                       49

<PAGE>



the applicable recording office to record and return a document submitted for
recordation, if known and (D) specify the date the applicable recorded document
is expected to be delivered to the Custodian, and, upon receipt of a copy of
such document certified by the public recording office, the Servicer shall
immediately deliver such document to the Custodian. In the event the appropriate
public recording office will not certify as to the accuracy of such document,
the Servicer shall deliver a copy of such document certified by an officer of
the Servicer to be a true and complete copy of the original to the Custodian.

                  SECTION 2.02. Acceptance by Trustee.

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

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

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



                                       50

<PAGE>



                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver (or cause the Custodian to deliver) to the Depositor and
the Servicer a final certification in the form annexed hereto as Exhibit F-2,
with any applicable exceptions noted thereon.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee (or the Custodian, as applicable) finds any document or documents
constituting a part of a Mortgage File to be missing or not to conform with
respect to any characteristics which are within the scope of the Trustee's (or
the Custodian's, as applicable) review as provided herein, at the conclusion of
its review, the Trustee shall so notify the Seller, the Depositor and the
Servicer. In addition, upon the discovery by the Depositor or the Servicer (or
upon receipt by the Trustee of written notification of such breach) of a breach
of any of the representations and warranties made by the Originator or the
Seller, as applicable, in the Mortgage Loan Purchase Agreement in respect of any
Mortgage Loan which materially adversely affects such Mortgage Loan or the
interests of the Certificateholders in such Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties to this
Agreement.

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

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

                  (a) Upon discovery or receipt of written notice of any
materially defective document in, or that a document is missing from, a Mortgage
File or of the breach by the Originator or the Seller of any representation,
warranty or covenant under the Mortgage Loan Purchase Agreement, in respect of
any Mortgage Loan which materially adversely affects the value of such Mortgage
Loan or the interest therein of the Certificateholders, the Trustee shall (to
the extent that the Trustee has received written notice from the Servicer)
promptly request that the Originator or the Seller, as applicable, deliver such
missing document or that the Originator or Seller, as applicable, cure such
defect or breach within 90 days from the date the Originator or Seller, as
applicable, was notified of such missing document, defect or breach, and if the
Originator or the Seller, as applicable, does not deliver such missing document
or if the Originator or the Seller, as applicable, does not cure such defect or
breach in all material respects during such period, the Trustee shall (to the
extent that the Trustee has received written notice from the Servicer) enforce
the Originator's or the Seller's obligation under the Mortgage Loan Purchase
Agreement and cause the Originator or the Seller, as applicable, to repurchase
such Mortgage Loan from the Trust Fund at the Purchase Price on or prior to the
Determination Date following the expiration of such 90 day period (subject to
Section 2.03(e)). The Purchase Price for the repurchased Mortgage Loan shall be
remitted to the Servicer


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<PAGE>


for deposit in the Collection Account, and the Trustee, upon receipt of written
certification from the Servicer of such deposit, shall release to the Originator
or the Seller, as applicable, the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Originator or the Seller, as applicable, shall furnish to it
and as shall be necessary to vest in the Originator or the Seller, as
applicable, any Mortgage Loan released pursuant hereto and the Trustee shall
have no further responsibility with regard to such Mortgage File (it being
understood that the Trustee shall have no responsibility for determining the
sufficiency of such assignment for its intended purpose). In lieu of
repurchasing any such Mortgage Loan as provided above, the Originator or the
Seller, as applicable, may cause such Mortgage Loan to be removed from the Trust
Fund (in which case it shall become a Deleted Mortgage Loan) and substitute one
or more Qualified Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(d); provided, however, neither the
Originator nor the Seller, as applicable, may substitute for any Mortgage Loan
which breaches a representation or warranty regarding abusive or predatory
lending laws. It is understood and agreed that the obligation of the Originator
or the Seller, as applicable, to cure or to repurchase (or to substitute for)
any Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Originator or the
Seller, as applicable, respecting such omission, defect or breach available to
the Trustee on behalf of the Certificateholders.

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

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

                  (d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the last Business Day that is within two years after the Closing Date.
As to any Deleted Mortgage Loan for which the Originator or the Seller, as
applicable, substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Originator or the Seller, as applicable,
delivering to the Trustee, for such Qualified Substitute Mortgage Loan or Loans,
the Mortgage Note, the Mortgage and the Assignment to the Trustee, and such
other documents and agreements, with all necessary endorsements thereon, as are
required by Section 2.01, together with an Officers' Certificate providing that
each such Qualified Substitute Mortgage Loan satisfies the definition thereof
and specifying the Substitution Adjustment (as described below), if any, in
connection with such substitution. The Trustee shall acknowledge receipt for
such Qualified Substitute Mortgage Loan or Loans and, within 45 days thereafter,
shall review such documents as specified in Section 2.02 and deliver to the
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit F-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Servicer a certification
substantially in the form of Exhibit F-2 hereto with respect to such Qualified


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<PAGE>



Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution are not part of the Trust Fund and will be retained by the
Seller. For the month of substitution, distributions to Certificateholders will
reflect the collections and recoveries in respect of such Deleted Mortgage Loan
in the Due Period preceding the month of substitution and the Originator or the
Seller, as applicable, shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The Servicer
shall give or cause to be given written notice to the Trustee, who shall forward
such notice to the Certificateholders, that such substitution has taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee. Upon such substitution by the
Originator or the Seller, as applicable, such Qualified Substitute Mortgage Loan
or Loans shall constitute part of the Mortgage Pool and shall be subject in all
respects to the terms of this Agreement and the Mortgage Loan Purchase
Agreement, including all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement as of the date of substitution.

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

                  In addition, the Originator or the Seller, as applicable,
shall obtain at its own expense and deliver to the Trustee an Opinion of Counsel
to the effect that such substitution will not cause (a) any federal tax to be
imposed on the Trust Fund, including without limitation, any federal tax imposed
on "prohibited transactions" under Section 860F(a)(I) of the Code or on
"contributions after the startup date" under Section 860G(d)(I) of the Code or
(b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is
outstanding. If such Opinion of Counsel can not be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.

                  (e) Upon discovery by the Depositor, the Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice


                                       53

<PAGE>



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

                  SECTION 2.04. Intentionally Omitted.

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

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

                  (i) The Servicer is a banking corporation duly formed, validly
         existing and in good standing as a banking corporation under the laws
         of the State of Ohio and is duly authorized and qualified to transact
         any and all business contemplated by this Agreement to be conducted by
         the Servicer in any state in which a Mortgaged Property is located or
         is otherwise not required under applicable law to effect such
         qualification and, in any event, is in compliance with the doing
         business laws of any such State, to the extent necessary to ensure its
         ability to enforce each Mortgage Loan and to service the Mortgage Loans
         in accordance with the terms of this Agreement;

                  (ii) The Servicer has the full power and authority to conduct
         its business as presently conducted by it and to execute, deliver and
         perform, and to enter into and consummate, all transactions
         contemplated by this Agreement. The 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 the Depositor and the Trustee,
         constitutes a legal, valid and binding obligation of the Servicer,
         enforceable against it in accordance with its terms except as the
         enforceability thereof may be limited by bankruptcy, insolvency,
         reorganization or similar laws affecting the enforcement of creditors'
         rights generally and by general principles of equity;

                  (iii) The execution and delivery of this Agreement by the
         Servicer, the servicing of the Mortgage Loans by the Servicer
         hereunder, the consummation by the Servicer of any other of the
         transactions herein contemplated, and the fulfillment of or compliance
         with the


                                       54

<PAGE>



         terms hereof are in the ordinary course of business of the Servicer and
         will not (A) result in a breach of any term or provision of the
         Articles of Incorporation or Code of Regulations of the Servicer or (B)
         conflict with, result in a breach, violation or acceleration of, or
         result in a default under, the terms of any other material agreement or
         instrument to which the Servicer is a party or by which it may be
         bound, or any statute, order or regulation applicable to the Servicer
         of any court, regulatory body, administrative agency or governmental
         body having jurisdiction over the Servicer; and the Servicer is not a
         party to, bound by, or in breach or violation of any indenture or other
         agreement or instrument, or subject to or in violation of any statute,
         order or regulation of any court, regulatory body, administrative
         agency or governmental body having jurisdiction over it, which
         materially and adversely affects or, to the Servicer's knowledge, would
         in the future materially and adversely affect, (x) the ability of the
         Servicer to perform its obligations under this Agreement, (y) the
         business, operations, financial condition, properties or assets of the
         Servicer taken as a whole or (z) the legality, validity or
         enforceability of this Agreement;

                  (iv) The Servicer is a HUD approved mortgagee pursuant to
         Section 203 and Section 211 of the National Housing Act. No event has
         occurred, including but not limited to a change in insurance coverage,
         that would make the Servicer unable to comply with HUD eligibility
         requirements or that would require notification to HUD;

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

                  (vi) No litigation is pending against the Servicer that would
         materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Servicer to
         service the Mortgage Loans or to perform any of its other obligations
         hereunder in accordance with the terms hereof;

                  (vii) There are no actions or proceedings against, or
         investigations known to it of, the Servicer before any court,
         administrative or other tribunal (A) that might prohibit its entering
         into this Agreement, (B) seeking to prevent the consummation of the
         transactions contemplated by this Agreement or (C) that might prohibit
         or materially and adversely affect the performance by the Servicer of
         its obligations under, or the validity or enforceability of, this
         Agreement;

                  (viii) No consent, approval, authorization or order of any
         court or governmental agency or body is required for the execution,
         delivery and performance by the Servicer of, or compliance by the
         Servicer with, this Agreement or the consummation by it of the
         transactions contemplated by this Agreement, except for such consents,
         approvals, authorizations or orders, if any, that have been obtained
         prior to the Closing Date;

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



                                       55

<PAGE>



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

                  (xi) The Servicer has fully furnished and will continue to
         fully furnish, in accordance with the Fair Credit Reporting Act and its
         implementing regulations, accurate and complete information (e.g.,
         favorable and unfavorable) on its borrower credit files to Equifax,
         Experian and Trans Union Credit Information Company or their successors
         (the "Credit Repositories") in a timely manner; and

                  (xii) Within 30 days of the Closing Date, the Servicer will be
         a member of MERS in good standing, and will comply in all material
         respects with the rules and procedures of MERS in connection with the
         servicing of the Mortgage Loans that are registered with MERS.

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

                  SECTION 2.06. Representations and Warranties of the Depositor.

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

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

                   (ii) Immediately prior to the sale and assignment by the
         Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
         the Depositor had good and marketable title


                                       56

<PAGE>



         to each Mortgage Loan (insofar as such title was conveyed to it by the
         Seller) subject to no prior lien, claim, participation interest,
         mortgage, security interest, pledge, charge or other encumbrance or
         other interest of any nature;

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

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

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

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

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

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



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

                  SECTION 2.07. Issuance of Certificates.

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

                  SECTION 2.08. [Reserved].

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

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

                  (b) The Depositor concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC 1 Regular Interests (which are uncertificated) for the
benefit of the Holders of the Regular Certificates and the Class R Certificates
(in respect of the Class R-2 Interest). The interests evidenced by the Class R-2
Interest, together with the Regular Certificates, constitute the entire
beneficial ownership interest in REMIC 2.



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                  (c) Concurrently with (i) the assignment and delivery to the
Trustee of REMIC 1 (including the Residual Interest therein represented by the
Class R-1 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.01, Section 2.02 and Section 2.09(a) and (ii) the assignment and
delivery to the Trustee of REMIC 2 (including the Residual Interest therein
represented by the Class R-2 Interest) and the acceptance by the Trustee
thereof, pursuant to Section 2.09(b), the Trustee, pursuant to the written
request of the Depositor executed by an officer of the Depositor, has executed,
authenticated and delivered to or upon the order of the Depositor, the Class R
Certificates (evidencing the Class R-1 Interest and the Class R-2 Interest) in
authorized denominations.



                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Servicer to Act as Servicer.

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

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

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

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

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

                  To the extent consistent with the foregoing, the Servicer (a)
shall seek the timely and complete recovery of principal and interest on the
Mortgage Notes and (b) shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan,
(ii) the collection of such Prepayment Charge is prohibited by applicable law or
(iii) the Servicer has not been provided with information sufficient to enable
it to collect the Prepayment Charge. If a Prepayment Charge is waived as
permitted by


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meeting the standard described in clauses (ii) or (iii) above, then the Servicer
shall enforce the obligation of the Originator under the Mortgage Loan Purchase
Agreement, as applicable, to pay the amount of such waived Prepayment Charge to
the Servicer for deposit in the Collection Account (to the extent paid by the
Seller). If a Prepayment Charge is waived other than as permitted by meeting the
standards described in clauses (i), (ii) and (iii) above, then as a remedy for
the breach of such covenant, the Servicer shall pay the amount of such waived
Prepayment Charge by depositing such amount into the Collection Account together
with and at the time that the amount prepaid on the related Mortgage Loan is
required to be deposited into the Collection Account. Notwithstanding any other
provisions of this Agreement, any payments made by the Servicer in respect of
any Prepayment Charges waived other than as permitted above shall be deemed to
be paid outside of the Trust Fund.


                  Subject only to the above-described servicing standards and
the terms of this Agreement and of the Mortgage Loans, the Servicer shall have
full power and authority, acting alone or through Sub-Servicers as provided in
Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver,
on behalf of the Certificateholders and the Trustee, and upon notice to the
Trustee, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties in the name of the Trustee, on behalf of the Trustee and
Certificateholders. The Servicer shall service and administer the Mortgage Loans
in accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
shall also comply in the performance of this Agreement with all reasonable rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.17, within 15 days of the Closing Date, the Trustee shall
execute, at the written request of the Servicer, and furnish to the Servicer and
any Sub-Servicer a limited power of attorney in the form of Exhibit I, executed
by each payee or last endorsee, as applicable, of each of the Mortgage Notes and
each mortgagee or last assignee, as applicable, of each of the Mortgages and
other documents necessary or appropriate to enable the Servicer or any
Sub-Servicer to carry out their servicing and administrative duties hereunder;
provided, such limited powers of attorney or other documents shall be prepared
by the Servicer and submitted to the Trustee for execution. The Trustee shall
not be liable for the actions of the Servicer or any Sub-Servicers under such
powers of attorney.

                  The Servicer further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name or
in the name of the Sub-Servicer, when the Servicer or the Sub-Servicer, as the
case may be, believes it is appropriate in its best judgment to register any
Mortgage Loan on the MERS(R) System, or cause the removal from the registration
of any Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of
the Trustee and the Certificateholders or any of them, any and all instruments
of assignment and other comparable instruments with respect to such assignment
or re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any reasonable expenses incurred


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in connection with the actions described in the preceding sentence or as a
result of MERS discontinuing or becoming unable to continue operations in
connection with the MERS(R) System, shall be subject to withdrawal by the
Servicer from the Collection Account.

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

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

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

                  (a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Certificates. The
Trustee is hereby authorized to acknowledge, at the request of the Servicer, any
Sub-Servicing Agreement that meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement and that is otherwise permitted under
this Agreement. No such acknowledgment shall be deemed to imply that the Trustee
has consented to any such Sub-Servicing Agreement, has passed upon whether such
Sub-Servicing Agreement meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement or has passed upon whether such
Sub-Servicing Agreement is otherwise permitted under this Agreement.

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states where the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage servicer. Each
Sub- Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions


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set forth in Section 3.08 and provide for servicing of the Mortgage Loans
consistent with the terms of this Agreement. The Servicer will examine each
Sub-Servicing Agreement and will be familiar with the terms thereof. The terms
of any Sub-Servicing Agreement will not be inconsistent with any of the
provisions of this Agreement. The Servicer and the Sub-Servicers may enter into
and make amendments to the Sub-Servicing Agreements or enter into different
forms of Sub-Servicing Agreements; provided, however, that any such amendments
or different forms shall be consistent with and not violate the provisions of
this Agreement, and that no such amendment or different form shall be made or
entered into which could be reasonably expected to be materially adverse to the
interests of the Certificateholders without the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights; provided, further,
that the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights shall not be required (i) to cure any ambiguity or defect in a
Sub-Servicing Agreement, (ii) to correct, modify or supplement any provisions of
a Sub- Servicing Agreement, or (iii) to make any other provisions with respect
to matters or questions arising under a Sub-Servicing Agreement, which, in each
case, shall not be inconsistent with the provisions of this Agreement. Any
variation without the consent of the Holders of Certificates entitled to at
least 66% of the Voting Rights from the provisions set forth in Section 3.08
relating to insurance or priority requirements of Sub-Servicing Accounts, or
credits and charges to the Sub- Servicing Accounts or the timing and amount of
remittances by the Sub-Servicers to the Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Servicer shall
deliver to the Trustee copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Servicer's execution and
delivery of such instruments.

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

                  SECTION 3.03. Successor Sub-Servicers.

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



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

                  SECTION 3.04. Liability of the Servicer.

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

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

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

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

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


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any successor Servicer shall be deemed to have assumed any liability or
obligation of the Servicer that arose before it ceased to be the Servicer.

                  The Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.

                  SECTION 3.07. Collection of Certain Mortgage Loan Payments.

                  The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Servicer may in its discretion (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the due dates for
the Monthly Payments due on a Mortgage Note for a period of not greater than 180
days; provided, however, that any extension pursuant to clause (ii) above shall
not affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.04
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangement. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"). The Servicer's analysis supporting any forbearance and the
conclusion that any forbearance meets the standards of Section 3.01 shall be
reflected in writing in the Mortgage File.

                  SECTION 3.08. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the


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extent permitted by the Sub-Servicing Agreement, and shall thereafter deposit
such amounts in the Sub-Servicing Account, in no event more than two Business
Days after the receipt of such amounts. The Sub-Servicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Servicer for deposit in the Collection Account not later than two Business Days
after the deposit of such amounts in the Sub-Servicing Account. For purposes of
this Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Sub-Servicer receives such payments.

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

                  The Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts"),
into which all Escrow Payments shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Servicer shall deposit in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer's receipt
thereof, all Escrow Payments collected on account of the Mortgage Loans and
shall thereafter deposit such Escrow Payments in the Servicing Accounts, in no
event more than two Business Days after the receipt of such Escrow Payments, all
Escrow Payments collected on account of the Mortgage Loans for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, hazard insurance premiums, and
comparable items in a manner and at a time that assures that the lien priority
of the Mortgage is not jeopardized (or, with respect to the payment of taxes, in
a manner and at a time that avoids the loss of the Mortgaged Property due to a
tax sale or the foreclosure as a result of a tax lien); (ii) reimburse the
Servicer (or a Sub-Servicer to the extent provided in the related Sub- Servicing
Agreement) out of related collections for any Servicing Advances made pursuant
to Section 3.01 (with respect to taxes and assessments) and Section 3.14 (with
respect to hazard insurance); (iii) refund to Mortgagors any sums as may be
determined to be overages; (iv) pay interest, if required and as described
below, to Mortgagors on balances in the Servicing Account; or (v) clear and
terminate the Servicing Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article X. In the event the Servicer shall deposit in a
Servicing Account any amount not required to be deposited therein, it may at any
time withdraw such amount from such Servicing Account, any provision herein to
the contrary notwithstanding. The Servicer will be responsible for the
administration of the Servicing Accounts and will be obligated to make Servicing
Advances to such accounts when and as necessary to avoid the lapse of insurance
coverage on the Mortgaged Property, or which the Servicer knows, or in the
exercise of the required standard of care of the Servicer hereunder should know,
is necessary to avoid the loss of the Mortgaged Property due to a tax sale or
the foreclosure as a result of a tax lien. If any such payment has not been made
and the Servicer receives notice of a tax lien with respect to the Mortgage
being imposed, the Servicer will, promptly and to the extent required to avoid
loss of the Mortgaged Property, advance or cause to be advanced funds necessary
to discharge such lien on the Mortgaged Property. As part of its servicing
duties, the Servicer or Sub-Servicers shall pay to the Mortgagors interest on
funds in the Servicing Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Servicing Accounts is insufficient,
to pay such interest from its or their own funds, without any


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reimbursement therefor. The Servicer may pay to itself any excess interest on
funds in the Servicing Accounts, to the extent such action is in conformity with
the servicing standard set forth in Section 3.01, is permitted by law and such
amounts are not required to be paid to Mortgagors or used for any of the other
purposes set forth above.

                  SECTION 3.10. Collection Account and Distribution Account.

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

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

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

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

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

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

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

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



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

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

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Servicer shall deliver to
the Trustee in immediately available funds for deposit in the Distribution
Account on or before 3:00 p.m. New York time (i) on the Servicer Remittance
Date, that portion of the Available Funds (calculated without regard to the
references in the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account, the amount of all Prepayment Charges collected during the
applicable Prepayment Period by the Servicer and Servicer Prepayment Charge
Payment Amounts in connection with the Principal Prepayment of any of the
Mortgage Loans then on deposit in the Collection Account and (ii) on each
Business Day as of the commencement of which the balance on deposit in the
Collection Account exceeds $75,000 following any withdrawals pursuant to the
next succeeding sentence, the amount of such excess, but only if the Collection
Account constitutes an Eligible Account solely pursuant to clause (ii) of the
definition of "Eligible Account." If the balance on deposit in the Collection
Account exceeds $75,000 as of the commencement of business on any Business Day
and the Collection Account constitutes an Eligible Account solely pursuant to
clause (ii) of the definition of "Eligible Account," the Servicer shall, on or
before 3:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to the Servicer,
the Trustee or any Sub-Servicer pursuant to Section 3.11 and shall pay such
amounts to the Persons entitled thereto.

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

                  (d) Funds held in the Collection Account at any time may be
delivered by the Servicer to the Trustee for deposit in an account (which may be
the Distribution Account and must satisfy the standards for the Distribution
Account as set forth in the definition thereof) and for all purposes of this
Agreement shall be deemed to be a part of the Collection Account; provided,
however, that the Trustee shall have the sole authority to withdraw any funds
held pursuant to this


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subsection (d). In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to it any such amount, any provision herein
to the contrary notwithstanding. In addition, the Servicer, with respect to
items (i) through (iv) below, shall deliver to the Trustee from time to time for
deposit, and the Trustee, with respect to items (i) through (iv) below, shall so
deposit, in the Distribution Account:

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

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

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

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

                  (v) any amounts required to be paid to the Trustee pursuant to
         the Agreement, including, but not limited to Section 3.06, Section 7.02
         and Section 8.05.

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

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

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

                  (ii) subject to Section 3.16(d), to reimburse itself for (a)
         any unreimbursed Advances to the extent of amounts received which
         represent Late Collections (net of the related Servicing Fees),
         Liquidation Proceeds and Insurance Proceeds on Mortgage Loans with
         respect to which such Advances were made in accordance with the
         provisions of Section 4.04; or (b) any unreimbursed Advances with
         respect to the final liquidation of a Mortgage Loan that are
         Nonrecoverable Advances, but only to the extent that Late Collections,
         Liquidation Proceeds and Insurance Proceeds received with respect to
         such Mortgage Loan are insufficient to reimburse the Servicer for such
         unreimbursed Advances;

                  (iii) subject to Section 3.16(d), to pay itself or any
         Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed
         Servicing Advances with respect to each Mortgage Loan, but only to the
         extent of any Late Collections, Liquidation Proceeds and Insurance
         Proceeds received with respect to such Mortgage Loan, and (c) any
         Servicing Advances made with respect to a Mortgage Loan that, upon a
         Final Recovery Determination with respect to such Mortgage Loan are
         Nonrecoverable Advances, but only to the extent that Late


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         Collections, Liquidation Proceeds, Insurance Proceeds and condemnation
         proceeds received with respect to such Mortgage Loan are insufficient
         to reimburse the Servicer or any Sub- Servicer for Servicing Advances;

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

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

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

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

                  (viii) to reimburse itself for expenses incurred by or
         reimbursable to it pursuant to Section 6.03;

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

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

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

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

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

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



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

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

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

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

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

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

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

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

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


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                  (b) All income and gain realized from the investment of funds
deposited in the Collection Account and any REO Account held by or on behalf of
the Servicer shall be for the benefit of the Servicer and shall be subject to
its withdrawal in accordance with Section 3.11, Section 3.31 or Section 3.23, as
applicable. The Servicer shall deposit in the Collection Account or any REO
Account, as applicable, the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such Account immediately
upon realization of such loss.

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

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

                  (e) The Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable to the Trustee pursuant to Section 3.11 or 3.12 or
otherwise payable in respect of extraordinary Trust Fund expenses.

                  SECTION 3.13. [Reserved].

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

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


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

                  In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of B:VI or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with the first two sentences of this
Section 3.14, and there shall have been one or more losses which would have been
covered by such policy, deposit to the Collection Account from its own funds the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.

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


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

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

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

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.15, the term "assumption" is
deemed to


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also include a sale (of the Mortgaged Property) subject to the Mortgage that is
not accompanied by an assumption or substitution of liability agreement.

                  SECTION 3.16. Realization Upon Defaulted Mortgage Loans.

                  (a) The Servicer shall use its best efforts, consistent with
         the servicing standards set forth in Section 3.01, to foreclose upon or
         otherwise comparably convert the ownership of properties securing such
         of the Mortgage Loans as come into and continue in default and as to
         which no satisfactory arrangements can be made for collection of
         delinquent payments pursuant to Section 3.07. The Servicer shall be
         responsible for all costs and expenses incurred by it in any such
         proceedings; provided, however, that such costs and expenses will be
         recoverable as Servicing Advances by the Servicer as contemplated in
         Section 3.11(a) and Section 3.23. The foregoing is subject to the
         provision that, in any case in which a Mortgaged Property shall have
         suffered damage from an Uninsured Cause, the Servicer shall not be
         required to expend its own funds toward the restoration of such
         property unless it shall determine in its discretion that such
         restoration will increase the proceeds of liquidation of the related
         Mortgage Loan after reimbursement to itself for such expenses.

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

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

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

                  The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the


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Collection Account as provided in Section 3.11(a)(vii), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.

                  For the purposes of this Section 3.16(b), actual notice and
actual knowledge of the Servicer means actual notice to or actual knowledge of a
Responsible Officer of the Servicer involved in the servicing of the relevant
Mortgage Loan. Actual knowledge of the Servicer does not include knowledge
imputable by virtue of the availability of or accessibility to information
relating to environmental or hazardous waste sites or the locations thereof.

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

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

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




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

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

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

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Servicer or the Sub-Servicer, as the
case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect


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of a Mortgaged Property or to any legal action brought to obtain judgment
against any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or rights provided by the Mortgage
Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.

                  SECTION 3.18. Servicing Compensation.

                  As compensation for the activities of the Servicer hereunder,
the Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of Insurance Proceeds, Liquidation
Proceeds or condemnation proceeds to the extent permitted by Section
3.11(a)(iii) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. Except as provided in Section
3.29 or Section 6.04, the right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Agreement; provided,
however, that the Servicer may pay from the Servicing Fee any amounts due to a
Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under Section
3.02.

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

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

                  Not later than twenty days after each Distribution Date, the
Servicer shall forward, upon request, to the Trustee and the Depositor the most
current available bank statement for the Collection Account. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Trustee.

                  SECTION 3.20. Statement as to Compliance.



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                  The Servicer will deliver to the Trustee and the Depositor not
later than March 15th of each calendar year, commencing in 2004, an Officers'
Certificate (substantially in the form attached hereto as Exhibit O) stating, as
to each signatory thereof, that (i) a review of the activities of the Servicer
during the preceding year and of performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has complied with this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Servicer to the
Trustee.

                  SECTION 3.21. Independent Public Accountants' Servicing
                                Report.

                   Not later than March 15th of each calendar year, commencing
in 2004, the Servicer, at its expense, shall cause a nationally recognized firm
of independent certified public accountants to furnish to the Servicer a report
stating that (i) it has obtained a letter of representation regarding certain
matters from the management of the Servicer which includes an assertion that the
Servicer has complied with certain minimum residential mortgage loan servicing
standards, identified in the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with respect
to the servicing of residential mortgage loans during the most recently
completed calendar year and (ii) on the basis of an examination conducted by
such firm in accordance with standards established by the American Institute of
Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. In rendering its report such firm may rely, as to matters
relating to the direct servicing of residential mortgage loans by Sub-Servicers,
upon comparable reports of firms of independent certified public accountants
rendered on the basis of examinations conducted in accordance with the same
standards (rendered within one year of such report) with respect to those
Sub-Servicers. Immediately upon receipt of such report, the Servicer shall
furnish a copy of such report to the Trustee and each Rating Agency. Copies of
such statement shall be provided by the Trustee to any Certificateholder upon
request at the Servicer's expense, provided that such statement is delivered by
the Servicer to the Trustee.

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

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



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

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

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


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the Trustee and their officers, directors and Affiliates regarding certain
aspects of the Certification (the "Servicer Certification").

                  In addition, (A) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors and Affiliates from and against any
actual losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon a breach of the Trustee's obligations under this Section
3.22(b) caused by the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (B) the Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any actual losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon (I) the failure of the Servicer to
timely deliver the Servicer Certification or (II) any material misstatement in
the Servicer Certification. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Depositor, then (i) the Trustee
agrees that it shall contribute to the amount paid or payable by the Depositor
as a result of the losses, claims, damages or liabilities of the Depositor in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other in connection with a breach of the
Trustee's obligations under this Section 3.22(b) caused by the Trustee's
negligence, bad faith or willful misconduct in connection therewith and (ii) the
Servicer agrees that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Servicer on the other in connection with
the Servicer Certification and the related obligations of the Servicer under
this Section 3.22(b).

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

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

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

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

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Servicer, on behalf of REMIC 1, shall sell any REO
Property as soon as practicable and in any event no later than the end of the
third full taxable year after the taxable year in which such REMIC acquires
ownership of such REO Property for purposes of Section 860G(a)(8) of the Code or
request from the Internal


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

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

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

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

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

                  (iii) all costs and expenses necessary to maintain such REO
         Property.

                  To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Servicer
shall advance from its own funds such amount as is necessary for


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such purposes if, but only if, the Servicer would make such advances if the
Servicer owned the REO Property and if in the Servicer's judgment, the payment
of such amounts will be recoverable from the rental or sale of the REO Property.

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

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

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

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

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

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

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

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

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

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



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

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

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

                  (e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Servicer in a manner,
at such price and upon such terms and conditions as shall be normal and usual in
the servicing standard set forth in Section 3.01.

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

                  (g) The Servicer shall file information returns with respect
to the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.

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



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                  Not later than 1:00 p.m. New York time on each Servicer
Remittance Date, the Servicer shall remit to the Distribution Account an amount
("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls on the Actuarial Mortgage Loans for the related
Distribution Date and (B) its aggregate Servicing Fee received in the related
Due Period. The Servicer shall not have the right to reimbursement for any
amounts remitted to the Trustee in respect of Compensating Interest. Such
amounts so remitted shall be included in the Available Funds and distributed
therewith on the next Distribution Date. The Servicer shall not be obligated to
pay Compensating Interest with respect to Prepayment Interest Shortfalls on
Simple Interest Mortgage Loans or Relief Act Interest Shortfalls.

                  SECTION 3.25. [Reserved].

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

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

                  SECTION 3.27. Solicitations.

                  From and after the Closing Date, the Servicer agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Servicer's behalf, to personally, by telephone or
mail, solicit the Mortgagor under any Mortgage Loan for the purpose of
refinancing such Mortgage Loan; provided, that the Servicer may solicit any
Mortgagor for whom the Servicer has received a request for verification of
mortgage, a request for demand for payoff, a mortgagor initiated written or
verbal communication indicating a desire to prepay the related Mortgage Loan,
another mortgage company has pulled a credit report on the mortgagor or the
mortgagor initiates a title search; provided further, it is understood and
agreed that promotions undertaken by the Servicer or any of its Affiliates which
(i) concern optional insurance products or other additional products or (ii) are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio,
telephone and television advertisements shall not constitute solicitation under
this Section, nor is the Servicer prohibited from responding to unsolicited
requests or inquiries made by a Mortgagor or an agent of a Mortgagor.
Furthermore, the Servicer shall be permitted to include in its monthly
statements to borrowers or otherwise, statements regarding the availability of
the Servicer's counseling services with respect to refinancing mortgage loans.


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                  SECTION 3.28. Net WAC Rate Carryover Reserve Account.

                  No later than the Closing Date, the Trustee shall establish
and maintain with itself a separate, segregated trust account titled, "Net WAC
Rate Carryover Reserve Account, Deutsche Bank National Trust Company, as
Trustee, in trust for registered Holders of Meritage Mortgage Loan Trust 2003-1,
Asset-Backed Certificates, Series 2003-1." All amounts deposited in the Net WAC
Rate Carryover Reserve Account shall be distributed to the Holders of the Class
A Certificates and the Mezzanine Certificates in the manner set forth in Section
4.01(d).

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

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

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

                  By accepting a Class C Certificate, each Class C
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Net WAC Rate Carryover Reserve Account the amounts
described in Section 4.01(d) on each Distribution Date as to which there is any
Net WAC Rate Carryover Amount rather than distributing such amounts to the Class
C Certificateholders. By accepting a Class C Certificate, each Class C
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.



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

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

                  SECTION 3.29. Advance Facility.

                  (a) The Servicer is hereby authorized to enter into a
financing or other facility (any such arrangement, an "Advance Facility"), the
documentation for which complies with Section 3.29(e) below, under which (1) the
Servicer assigns or pledges its rights under this Agreement to be reimbursed for
any or all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party shall be required before the
Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to the Servicer. Notwithstanding the existence of any Advance
Facility under which an Advance Financing Person agrees to fund Advances and/or
Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to this
Agreement to make Advances and/or Servicing Advances pursuant to and as required
by this Agreement and (ii) shall not be relieved of such obligations by virtue
of such Advance Facility and (B) neither the Advance Financing Person nor any
Servicer's Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.

                  (b) If the Servicer enters into an Advance Facility, the
Servicer and the related Advance Financing Person shall deliver to the Trustee
at the address set forth in Section 11.05 hereof a written notice (an "Advance
Facility Notice"), stating (a) the identity of the Advance Financing Person and
(b) the identity of the Person (the "Servicer's Assignee") that will, subject to
Section 3.29(c) hereof, have the right to make withdrawals from the Collection
Account pursuant to Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and
(vii) hereof to reimburse previously unreimbursed Advances and/or Servicing
Advances ("Advance Reimbursement Amounts"). Advance Reimbursement Amounts (i)
shall consist solely of amounts in respect of Advances and/or Servicing Advances
for which the Servicer would be permitted to reimburse itself in accordance with
Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof, assuming
the Servicer had made the related Advance(s) and/or Servicing Advance(s) and
(ii) shall not consist of amounts payable to a successor Servicer in accordance
with Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof to
the extent permitted under Section 3.29(e) below.



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                  (c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Facility Person, shall be entitled to receive
reimbursements of Advances and/or Servicing Advances in accordance with Section
3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof, which
entitlement may be terminated by the Advance Financing Person pursuant to a
written notice to the Trustee in the manner set forth in Section 11.05 hereof.
Upon receipt of such written notice, the Servicer shall no longer be entitled to
receive reimbursement for any Advance Reimbursement Amounts and the Servicer's
Assignee shall immediately have the right to receive from the Collection Account
all Advance Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer's Assignee shall only
be entitled to reimbursement of Advance Reimbursement Amounts hereunder from
withdrawals from the Collection Account pursuant to Section 3.11(a) clauses
(ii)(a), (ii)(b), (iii), (vi) and (vii) of this Agreement and shall not
otherwise be entitled to make withdrawals or receive amounts that shall be on
deposit in the Distribution Account or that are required to be deposited in the
Distribution Account pursuant to any provision hereunder, and (ii) none of the
Trustee or the Certificateholders shall have any right to, or otherwise be
entitled to, receive any Advance Reimbursement Amounts to which the Servicer or
Servicer's Assignee, as applicable, shall be entitled pursuant to Section
3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii). An Advance Facility may
be terminated by the joint written direction of the Servicer and the related
Advance Financing Person. Written notice of such termination shall be delivered
to the Trustee in the manner set forth in Section 11.05 hereof. None of the
Depositor or the Trustee shall, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the calculation
or payment of any Advance Reimbursement Amount, nor, as a result of the
existence of any Advance Facility, shall the Depositor or the Trustee have any
additional responsibility to track or monitor the administration of the Advance
Facility or the payment of Advance Reimbursement Amounts to the Servicer's
Assignee. The Servicer hereby agrees to indemnify the Depositor, the Trustee,
any successor Servicer and the Trust Fund resulting from any claim by the
related Advancing Financing Person. The Servicer shall maintain and provide to
any successor Servicer and, upon request, the Trustee a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any Advancing Financing Person. The successor Servicer shall be
entitled to rely on any such information provided by the predecessor Servicer,
and the successor Servicer shall not be liable for any errors in such
information.

                  (d) An Advance Financing Person who receives an assignment or
pledge of rights to receive Advance Reimbursement Amounts and/or whose
obligations are limited to the funding of Advances and/or Servicing Advances
pursuant to an Advance Facility shall not be required to meet the criteria for
qualification as a Sub-Servicer.

                  (e) As between a predecessor Servicer and its Advance
Financing Person, on the one hand, and a successor Servicer and its Advance
Financing Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an Advance Reimbursement Amount related to
Advances and/or Servicing Advances that were made by a Person other than such
predecessor Servicer or its related Advance Financing Person in error, then such
Servicer's Assignee shall be required to remit any portion of such Advance
Reimbursement Amount to each Person entitled to such portion of such Advance
Reimbursement


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Amount. Without limiting the generality of the foregoing, the Servicer shall
remain entitled to be reimbursed by the Advance Financing Person for all
Advances and/or Servicing Advances funded by the Servicer to the extent the
related Advance Reimbursement Amounts have not been assigned or pledged to such
Advance Financing Person or Servicer's Assignee.

                  (f) For purposes of any Officer's Certificate of the Servicer
made pursuant to Section 4.04(d), any Nonrecoverable Advance referred to therein
may have been made by such Servicer or any predecessor Servicer. In making its
determination that any Advance or Servicing Advance theretofore made has become
a Nonrecoverable Advance, the Servicer shall apply the same criteria in making
such determination regardless of whether such Advance or Servicing Advance shall
have been made by the Servicer or any predecessor Servicer.

                  (g) Any amendment to this Section 3.29 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.29,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor and the Servicer without the consent
of any Certificateholder, provided such amendment complies with Section 11.01
hereof. All reasonable costs and expenses (including attorneys' fees) of each
party hereto of any such amendment shall be borne solely by the Servicer. The
parties hereto hereby acknowledge and agree that: (a) the Advances and/or
Servicing Advances financed by and/or pledged to an Advance Financing Person
under any Advance Facility are obligations owed to the Servicer payable only
from the cash flows and proceeds received under this Agreement for reimbursement
of Advances and/or Servicing Advances only to the extent provided herein, and
the Trustee and the Trust are not, as a result of the existence of any Advance
Facility, obligated or liable to repay any Advances and/or Servicing Advances
financed by the Advance Financing Person; (b) the Servicer will be responsible
for remitting to the Advance Financing Person the applicable amounts collected
by it as reimbursement for Advances and/or Servicing Advances funded by the
Advance Financing Person, subject to the provisions of this Agreement; and (c)
the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and any Advance
Financing Person.





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                                   ARTICLE IV

                                  FLOW OF FUNDS

                  SECTION 4.01. Distributions.

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

                  (i) to the Holders of the Class I-A1 Certificates, the Monthly
         Interest Distributable Amount and the Unpaid Interest Shortfall Amount,
         if any, for such Certificates; and

                  (ii) to the Holders of the Class II-A2 Certificates, an amount
         equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(a)(II)(i) below for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such clause from the Group II Interest Remittance Amount.

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

                  (i) to the Holders of the Class II-A2 Certificates, the
         Monthly Interest Distributable Amount and the Unpaid Interest Shortfall
         Amount, if any, for such Certificates; and

                  (ii) to the Holders of the Class I-A1 Certificates, an amount
         equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(a)(I)(i) above for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such clause from the Group I Interest Remittance Amount.

                  (III) On each Distribution Date, following the distributions
         made pursuant to Section 4.01(a)(I) and (II) above, the Trustee shall
         make the following disbursements and transfers in the order of priority
         described below, in each case to the extent of the sum of the Group I
         Interest Remittance Amount and the Group II Interest Remittance Amount
         remaining undistributed for such Distribution Date.

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



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

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

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

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

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

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

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

                  (i) first, to the Holders of the Class I-A1 Certificates,
         until the Certificate Principal Balance thereof has been reduced to
         zero; and

                  (ii) second, after taking into account the amount distributed
         to the Holders of the Class II-A2 Certificates pursuant to Section
         4.01(b)(II)(i) below on such Distribution Date, to the Holders of the
         Class II-A2 Certificates, until the Certificate Principal Balance
         thereof has been reduced to zero.

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

                  (i) first, to the Holders of the Class II-A2 Certificates,
         until the Certificate Principal Balance thereof has been reduced to
         zero; and

                  (ii) second, after taking into account the amount distributed
         to the Holders of the Class I-A1 Certificates pursuant to Section
         4.01(b)(I)(i) above on such Distribution Date, to the Holders of the
         Class I-A1 Certificates, until the Certificate Principal Balance
         thereof has been reduced to zero.

                  (III) On each Distribution Date (a) prior to the Stepdown Date
         or (b) on which a Trigger Event is in effect, distributions in respect
         of principal to the extent of the sum of the Group I Principal
         Distribution Amount and the Group II Principal Distribution Amount
         remaining


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<PAGE>



undistributed for such Distribution Date shall be made in the following amounts
and order of priority:

                  (i) first, to the Holders of the Class M-1 Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero;

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

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

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

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

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

                  (vii) seventh, to the Holders of the Class M-7 Certificates,
         until the Certificate Principal Balance thereof has been reduced to
         zero.

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

                  (i) first, to the Holders of the Class I-A1 Certificates, the
         Class I-A1 Principal Distribution Amount until the Certificate
         Principal Balance thereof has been reduced to zero; and

                  (iii) second, to the holders of the Class II-A2 Certificates,
         an amount equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(c)(II)(i) below for such
         Distribution Date over (y) the amount actually distributed pursuant to
         Section 4.01(c)(II)(i) below from the Group II Principal Distribution
         Amount on such Distribution Date.

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

                  (i) first, to the Holders of the Class II-A2 Certificates, the
         Class II-A2 Principal Distribution Amount until the Certificate
         Principal Balance thereof has been reduced to zero; and



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                  (ii) second, to the holders of the Class I-A1 Certificates, an
         amount equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(c)(I)(i) above for such
         Distribution Date over (y) the amount actually distributed pursuant to
         Section 4.01(c)(I)(i) above from the Group I Principal Distribution
         Amount on such Distribution Date.

                  (III) On each Distribution Date (a) on or after the Stepdown
         Date and (b) on which a Trigger Event is not in effect, distributions
         in respect of principal to the extent of the sum of the Group I
         Principal Distribution Amount and the Group II Principal Distribution
         Amount remaining undistributed for such Distribution Date shall be made
         in the following amounts and order of priority:

                  (i) first, to the Holders of the Class M-1 Certificates, the
         Class M-1 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

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

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

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

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

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

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

                  (d) On each Distribution Date, the Net Monthly Excess Cashflow
         shall be distributed as follows:

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

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



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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  (xvii) to the Holders of the Class C Certificates, the Monthly
         Interest Distributable Amount for such Class and any
         Overcollateralization Release Amount for such Distribution Date;


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

                  (xix) any remaining amounts to the Holders of the Residual
         Certificates (in respect of the appropriate Class R Interest).

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

                  (A) first, to the Class A Certificates and the Mezzanine
Certificates, any related unpaid Net WAC Rate Carryover Amount (in each case
only up to a maximum amount equal to the Cap Amount for the related Class)
distributed in the following order of priority:

                  (i) concurrently, to the Class A Certificates, on a PRO RATA
basis based on the Net WAC Rate Carryover Amount of each such Class;

                  (ii) to the Class M-1 Certificates;

                  (iii) to the Class M-2 Certificates;

                  (iv) to the Class M-3 Certificates;

                  (v) to the Class M-4 Certificates;

                  (vi) to the Class M-5 Certificates;

                  (vii) to the Class M-6 Certificates; and

                  (viii) to the Class M-7 Certificates;

                  (B) second, to the Class A Certificates and the Mezzanine
Certificates, any related unpaid Net WAC Rate Carryover Amount (after taking
into account distributions pursuant to (A) above), distributed in the following
order of priority:

                  (i) concurrently, to the Class A Certificates, on a PRO RATA
basis based on the remaining unpaid Net WAC Rate Carryover Amount for each such
Class;

                  (ii) to the Class M-1 Certificates;

                  (iii) to the Class M-2 Certificates;



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                  (iv) to the Class M-3 Certificates;

                  (v) to the Class M-4 Certificates;

                  (vi) to the Class M-5 Certificates;

                  (vii) to the Class M-6 Certificates; and

                  (viii) to the Class M-7 Certificates;

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

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

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

                  SECTION 4.02. Reserved.

                  SECTION 4.03. Statements.

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



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

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

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

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

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

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

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

                  (viii) the number and aggregate unpaid principal balance of
         Mortgage Loans that were (A) Delinquent (exclusive of Mortgage Loans in
         bankruptcy or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60
         to 89 days and (3) 90 or more days, (B) as to which foreclosure
         proceedings have been commenced and Delinquent (1) 30 to 59 days, (2)
         60 to 89 days and (3) 90 or more days, (C) in bankruptcy and Delinquent
         (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, in each
         case as of the Close of Business on the last day of the calendar month
         preceding such Distribution Date and (D) REO Properties;

                  (ix) payments, if any, made under the Cap Contract;

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

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

                  (xii) the aggregate amount of Realized Losses incurred during
         the related Prepayment Period and the cumulative amount of Realized
         Losses;



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

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

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

                  (xvi) the aggregate amount of any Prepayment Interest
         Shortfalls for such Distribution Date, to the extent not covered by
         payments by the Servicer pursuant to Section 3.24;

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

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

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

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

                  (xxi) the Available Funds; and

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

                  The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and the Rating Agencies via the
Trustee's internet website. The Trustee's internet website shall initially be
located at "https://www.corporatetrust.db.com/invr". Assistance in using the
website can be obtained by calling the Trustee's customer service desk at (800)
735-7777. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes. As a condition to access to the Trustee's internet
website, the Trustee may require registration and the acceptance of a
disclaimer.


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The Trustee will not be liable for the dissemination of information in
accordance with this Agreement. The Trustee shall also be entitled to rely on
but shall not be responsible for the content or accuracy of any information
provided by third parties for purposes of preparing the Distribution Date
statement and may affix thereto any disclaimer it deems appropriate in its
reasonable discretion (without suggesting liability on the part of any other
party thereto).

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

                  (b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall, upon written request, furnish to each Person
who at any time during the calendar year was a Certificateholder of a Regular
Certificate, if requested in writing by such Person, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i) through (iii) above, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.

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

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

                  SECTION 4.04. Remittance Reports; Advances.

                  (a) On the second Business Day following each Determination
Date, the Servicer shall deliver to the Trustee by telecopy or electronic mail
(or by such other means as the Servicer and the Trustee may agree from time to
time) a Remittance Report with respect to the related Distribution Date. Not
later than the second Business Day following each Determination Date, the
Servicer shall deliver or cause to be delivered to the Trustee in addition to
the information provided on the Remittance Report, such other information
reasonably available to it with respect to the Mortgage Loans as the Trustee may
reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to
Certificateholders contemplated by Section 4.03. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Servicer.


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                  (b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee and other
than the portion of the Monthly Payment representing principal on any second
lien Mortgage Loan), due during the related Due Period in respect of the
Mortgage Loans, which Monthly Payments were delinquent on a contractual basis as
of the Close of Business on the related Determination Date and (ii) with respect
to each REO Property, which REO Property was acquired during or prior to the
related Due Period and as to which REO Property an REO Disposition did not occur
during the related Due Period, an amount equal to the excess, if any, of the REO
Imputed Interest on such REO Property for the most recently ended calendar
month, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date. For purposes of the preceding sentence, the Monthly Payment
on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the
assumed monthly payment that would have been due on the related Due Date based
on the original principal amortization schedule for such Balloon Mortgage Loan.

                  On or before 3:00 p.m. New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case it will cause to be made an appropriate entry in the
records of Collection Account that amounts held for future distribution have
been, as permitted by this Section 4.04, used by the Servicer in discharge of
any such Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of Advances to be made by the Servicer with respect
to the Mortgage Loans and REO Properties. Any amounts held for future
distribution used by the Servicer to make an Advance as permitted in the
preceding sentence shall be appropriately reflected in the Servicer's records
and replaced by the Servicer by deposit in the Collection Account on or before
any future Servicer Remittance Date to the extent that the Available Funds for
the related Distribution Date (determined without regard to Advances to be made
on the Servicer Remittance Date) shall be less than the total amount that would
be distributed to the Classes of Certificateholders pursuant to Section 4.01 on
such Distribution Date if such amounts held for future distributions had not
been so used to make Advances or reimburse the Servicer for Advances previously
made. The Trustee will provide notice to the Servicer by telecopy by the Close
of Business on any Servicer Remittance Date in the event that the amount
remitted by the Servicer to the Trustee on such date is less than the Advances
required to be made by the Servicer for the related Distribution Date, as set
forth in the related Remittance Report.

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

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


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if made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Servicer delivered to the Depositor and the
Trustee.

                  SECTION 4.05. [Reserved]

                  SECTION 4.06. [Reserved]

                  SECTION 4.07. Distributions on the REMIC Regular Interests.

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


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

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

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

                           (b) to the Holders of REMIC 1 Regular Interest LTA1,
                  REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest LTM1,
                  REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3,
                  REMIC 1 Regular Interest LTM4, REMIC 1 Regular Interest LTM5,
                  REMIC 1 Regular Interest LTM6 and REMIC 1 Regular Interest
                  LTM7, 1.00% of such remainder, in the same proportion as
                  principal


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                  payments are allocated to the Corresponding Certificates,
                  until the Uncertificated Principal Balances of such REMIC 1
                  Regular Interests are reduced to zero and the Uncertificated
                  Principal Balance of REMIC I Regular Interest LTZZ shall be
                  increased by such amount;

                           (c) to the Holders of REMIC 1 Regular Interest LTZZ,
                  1.00% of such remainder, until the Uncertificated Principal
                  Balance of REMIC 1 Regular Interest LTZZ is reduced to zero;
                  and

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

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

                  (iii) Notwithstanding the distributions described in this
Section 4.07(a), distribution of funds shall be made only in accordance with
Section 4.01(a).

                  SECTION 4.08. Allocation of Realized Losses.

                  (a) All Realized Losses on the Mortgage Loans allocated to any
Regular Certificate shall be allocated by the Trustee on each Distribution Date
as follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-7 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-6 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-5 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; sixth, to the Class M-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; seventh, to the
Class M-3 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; eighth to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and ninth to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero. All Realized Losses to be allocated to the Certificate Principal
Balances of all Classes on any Distribution Date shall be so allocated after the
actual distributions to be made on such date as provided above. All references
above to the Certificate Principal Balance of any Class of Certificates shall be
to the Certificate Principal Balance of such Class immediately prior to the
relevant Distribution Date, before reduction thereof by any Realized Losses, in
each case to be allocated to such Class of Certificates, on such Distribution
Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated;


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any allocation of Realized Losses to a Class C Certificates shall be made first
by reducing the amount otherwise payable in respect thereof pursuant to Section
4.01(d). No allocations of any Realized Losses shall be made to the Certificate
Principal Balances of the Class A Certificates or the Class P Certificates.

                  (b) All Realized Losses on the Mortgage Loans shall be deemed
to have been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LTAA and
REMIC 1 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 1
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LTAA and REMIC 1
Regular Interest LTZZ up to an aggregate amount equal to the REMIC 1 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest
LTM7 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM7 has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LTAA, REMIC 1 Regular Interest LTM6 and REMIC 1 Regular
Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LTM6 has been reduced to zero; fifth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1
Regular Interest LTM5 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LTM5 has been reduced to zero; sixth, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest LTM4 and
REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM4 has been
reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LTAA, REMIC 1 Regular Interest LTM3 and REMIC 1 Regular
Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LTM3 has been reduced to zero; eighth, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1
Regular Interest LTM2 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LTM2 has been reduced to zero; and ninth, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest
LTM7 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM7 has been
reduced to zero.



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                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01. The Certificates.

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

                  The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Class A Certificates
and the Mezzanine Certificates shall be Book-Entry Certificates. The other
Classes of Certificates shall not be Book-Entry Certificates.

                  SECTION 5.02. Registration of Transfer and Exchange of
                                Certificates.

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

                  Upon surrender for registration of transfer of any Certificate
at any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph which office shall initially be the offices
of the Trustee's agent located at c/o DTC Transfer Agent Services, 55 Water
Street, Jeanette Park Entrance, New York, New York 10041 and, in the case of a
Residual


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Certificate, upon satisfaction of the conditions set forth below, the Trustee on
behalf of the Trust shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
aggregate Percentage Interest.

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

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

                  All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any


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conflict between the terms of any such Letter of Representation and this
Agreement, the terms of this Agreement shall control.

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

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

                  Notwithstanding the foregoing, no certification or Opinion of
Counsel described in this Section 5.02(d) will be required in connection with
the transfer, on the Closing Date, of any


                                       105

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Residual Certificate by the Depositor to an "accredited investor" within the
meaning of Rule 501 of the 1933 Act.

                  No transfer of a Class P Certificate, Class C Certificate or
Residual Certificate or any interest therein shall be made to any Plan subject
to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly,
on behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as certified by such
transferee in the form of Exhibit M, unless the Trustee is provided with an
Opinion of Counsel for the benefit of the Depositor, the Trustee and the
Servicer and on which they may rely which establishes to the satisfaction of the
Trustee that the purchase of such Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor, the Servicer, the
Trustee or the Trust Fund to any obligation or liability (including obligations
or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer, the Trustee or the Trust Fund. Neither a
certification nor an Opinion of Counsel will be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.

                  Each Transferee of a Mezzanine Certificate will be deemed to
have represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 90-59, 55
Fed. Reg. 36724 (September 6, 1990), as amended by PTE 97-34, 62 Fed. Reg. 39021
(July 21, 1997), PTE 2000-58, 65 Fed. Reg. 67765 (November 13, 2000) and PTE
2002-41, 67 Fed. Reg. 54487 (August 22, 2002) (the "Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by a Rating Agency or (c)
the following conditions are satisfied: (i) such Transferee is an insurance
company, (ii) the source of funds used to purchase or hold such Certificate (or
interest therein) is an "insurance company general account" (as defined in U.S.
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.

                  If any Mezzanine Certificate, Class P Certificate, Class C
Certificate or Residual Certificate or any interest therein is acquired or held
in violation of the provisions of the two preceding paragraphs, the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate retroactive to the date of transfer to the purported beneficial
owner. Any purported beneficial owner whose acquisition or holding of any such
Certificate or interest therein was effected in violation of the provisions of
the two preceding paragraphs shall indemnify and hold harmless the Depositor,
the Servicer, the Trustee and the Trust from and against any and all
liabilities, claims, costs or expenses incurred by those parties as a result of
that acquisition or holding.


                                       106

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

                  (i)      Each Person holding or acquiring any Ownership
                           Interest in a Residual Certificate shall be a
                           Permitted Transferee and shall promptly notify the
                           Trustee of any change or impending change in its
                           status as a Permitted Transferee.

                  (ii)     No Person shall acquire an Ownership Interest in a
                           Residual Certificate unless such Ownership Interest
                           is a PRO RATA undivided interest.

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

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

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

                  (iv)     Any attempted or purported transfer of any Ownership
                           Interest in a Residual Certificate in violation of
                           the provisions of this Section shall be absolutely
                           null and void and shall vest no rights in the
                           purported transferee. If any purported transferee
                           shall, in violation of the provisions of this
                           Section, become a Holder of a Residual Certificate,
                           then the prior Holder of such Residual Certificate
                           that is a Permitted Transferee shall, upon discovery
                           that the registration of transfer of such Residual
                           Certificate was not in fact permitted by this
                           Section, be restored to all rights as Holder thereof
                           retroactive to the date of registration of transfer
                           of such Residual Certificate. The Trustee shall be
                           under no liability to any Person for any registration
                           of transfer of a Residual Certificate that is in fact
                           not permitted by this Section or for making any
                           distributions due on such Residual Certificate to the
                           Holder thereof or taking any other action with
                           respect to such Holder under the provisions of this
                           Agreement so long as the Trustee received the
                           documents specified in clause (iii). The Trustee
                           shall be entitled to recover from any Holder of a
                           Residual Certificate that was in fact not a Permitted
                           Transferee at the time such distributions were made
                           all distributions made on such Residual Certificate.
                           Any such distributions so recovered by the Trustee
                           shall be distributed and delivered by the Trustee to
                           the prior Holder of such Residual Certificate that is
                           a Permitted Transferee.



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

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

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

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

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

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

                  If (i) any mutilated Certificate is surrendered to the
Certificate Registrar or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (ii) there
is delivered to the Trustee, the Depositor and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or


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other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Certificate
Registrar) in connection therewith. Any duplicate Certificate issued pursuant to
this Section, shall constitute complete and indefeasible evidence of ownership
in the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

                  SECTION 5.04. Persons Deemed Owners.

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

                  SECTION 5.05. Appointment of Paying Agent.

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

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



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                                   ARTICLE VI

                         THE SERVICER AND THE DEPOSITOR

                  SECTION 6.01. Liability of the Servicer and the Depositor.

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

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

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

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

                  Neither the Servicer or the Depositor nor any of the directors
or officers or employees or agents of the Servicer or the Depositor shall be
under any liability to the Trust or the Certificateholders for any action taken
or for refraining from the taking of any action by the Servicer or the Depositor
in good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer, the Depositor or
any such Person against any liability which would otherwise be imposed by reason
of its willful misfeasance, bad faith or negligence in the performance of duties
of the Servicer or the Depositor, as the case may be, or by reason of its
reckless disregard of its obligations and duties of the Servicer or the
Depositor, as the case may be, hereunder; provided, further, that this provision
shall not be construed to entitle the Servicer to indemnity in the event that
amounts advanced by the Servicer to retire any senior lien exceed Liquidation
Proceeds (in excess of related liquidation expenses) realized with respect to
the related Mortgage Loan. The Servicer and any director or officer or employee
or agent of the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Servicer and the Depositor, and any director or officer
or employee or agent of the Servicer or the Depositor, shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of its willful misfeasance, bad faith or negligence
in the performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer or the Depositor may undertake
any such action which it may deem necessary or desirable in respect of this


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Agreement, and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, unless the Depositor or the
Servicer acts without the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and the Servicer shall be entitled to be reimbursed
therefor from the Collection Account as and to the extent provided in Section
3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account. The
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Servicer pursuant to Section 6.04
or 7.01 with respect to any losses, expenses, costs or liabilities arising prior
to such resignation or termination (or arising from events that occurred prior
to such resignation or termination). This paragraph shall apply to the Servicer
solely in its capacity as Servicer hereunder and in no other capacities.

                  SECTION 6.04. Servicer Not to Resign.

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

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

                  SECTION 6.05. Delegation of Duties.

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

                  SECTION 6.06. Reserved.


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                  SECTION 6.07. Inspection.

                  The Servicer, in its capacity as Servicer, shall afford the
Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Servicer in respect of its rights and obligations
hereunder and access to officers of the Servicer responsible for such
obligations. Upon request, the Servicer shall furnish to the Trustee its most
recent publicly available financial statements and such other information
relating to its capacity to perform its obligations under this Agreement.




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                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01. Servicer Events of Termination.

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

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

                  (ii) The failure by the Servicer to make any required
         Servicing Advance which failure continues unremedied for a period of 30
         days, or the failure by the Servicer duly to observe or perform, in any
         material respect, any other covenants, obligations or agreements of the
         Servicer as set forth in this Agreement, which failure continues
         unremedied for a period of 30 days, after the date (A) on which written
         notice of such failure, requiring the same to be remedied, shall have
         been given to the Servicer by the Trustee or to the Trustee by any
         Holders of a Regular Certificate evidencing at least 25% of the Voting
         Rights or (B) of actual knowledge of such failure by a Servicing
         Officer of the Servicer; or

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

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



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                  (v) Any failure by the Servicer of the Servicer Termination
Test;

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

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  (a) Within 90 days of the time the Servicer (and the Trustee,
if notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor Servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions


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set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof arising on and after its succession.
Notwithstanding the foregoing, the parties hereto agree that the Trustee, in its
capacity as successor Servicer, immediately will assume all of the obligations
of the Servicer to make advances. Notwithstanding the foregoing, the Trustee, in
its capacity as successor Servicer, shall not be responsible for the lack of
information and/or documents that it cannot obtain through reasonable efforts.
As compensation therefor, the Trustee (or such other successor Servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Servicer hereunder, the Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.18 (or such other
compensation as the Trustee and such successor shall agree, not to exceed the
Servicing Fee). The appointment of a successor Servicer shall not affect any
liability of the predecessor Servicer which may have arisen under this Agreement
prior to its termination as Servicer to pay any deductible under an insurance
policy pursuant to Section 3.14 or to reimburse the Trustee pursuant to Section
3.06), nor shall any successor Servicer be liable for any acts or omissions of
the predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein or in any related document or
agreement. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.

                  (b) Any successor to the Servicer, including the Trustee,
shall during the term of its service as servicer continue to service and
administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
fidelity bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.14.

                  All Servicing Transfer Costs shall be paid by the predecessor
Servicer upon presentation of reasonable documentation of such costs, and if
such predecessor Servicer defaults in its obligation to pay such costs, such
costs shall be paid by the successor Servicer or the Trustee (in which case the
successor Servicer or the Trustee, as applicable, shall be entitled to
reimbursement therefor from the assets of the Trust).

                  (c) In connection with the termination or resignation of the
Servicer hereunder, either (i) the successor servicer, including the Trustee if
the Trustee is acting as successor Servicer, shall represent and warrant that it
is a member of MERS in good standing and shall agree to comply


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in all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans that are registered with MERS, in which
case the predecessor Servicer shall cooperate with the successor Servicer in
causing MERS to revise its records to reflect the transfer of servicing to the
successor Servicer as necessary under MERS' rules and regulations, or (ii) the
predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to execute and deliver an assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the Trustee and to execute and deliver such other
notices, documents and other instruments as may be necessary or desirable to
effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS(R) System to the successor Servicer. The predecessor Servicer (or, if
the Trustee is the predecessor Servicer, the initial Servicer) shall file or
cause to be filed any such assignment in the appropriate recording office. The
predecessor Servicer shall bear any and all fees of MERS, costs of preparing any
assignments of Mortgage, and fees and costs of filing any assignments of
Mortgage that may be required under this Section 7.02(d).

                  (d) If the Servicer is terminated pursuant to Section 7.01,
then the successor Servicer shall not be permitted to reimburse itself directly
for Advances or Servicing Advances under Section 3.11(a)(ii), Section
3.11(a)(iii) or Section 3.11(a)(vii), if the Servicer has not been fully
reimbursed for its Advances and Servicing Advances, but instead the successor
Servicer shall include such amounts in the applicable remittance to the Trustee
made pursuant to Section 3.10(d) to the extent of amounts on deposit in the
Collection Account on the related Servicer Remittance Date. The Trustee is
hereby authorized to pay to the terminated Servicer and the successor Servicer,
as applicable, reimbursements for Advances and Servicing Advances from the
Distribution Account to the same extent each such Servicer would have been
permitted to reimburse itself for such Advances and/or Servicing Advances in
accordance with Section 3.11(a)(ii), Section 3.11(a)(iii) or Section
3.11(a)(vii), as the case may be. All Advances and Servicing Advances made
pursuant to the terms of this Agreement shall be deemed made and shall be
reimbursed on a "first in-first out" (FIFO) basis. At such time as the Servicer
has been reimbursed for all Advances and Servicing Advances made by it, the
successor Servicer shall no longer be required to remit in accordance with the
first sentence of this Section 7.02(d) and shall then be permitted to reimburse
itself directly for Advances and Servicing Advances in accordance with Section
3.11(a)(ii), Section 3.11(a)(iii) or Section 3.11(a)(vii).

                  SECTION 7.03. Waiver of Defaults.

                  The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII, provided, however, that the Majority
Certificateholders may not waive a default in making a required distribution on
a Certificate without the consent of the Holder of such Certificate. Upon any
waiver of a past default, such default shall cease to exist and any Servicer
Event of Termination arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee to
the Rating Agencies.

                  SECTION 7.04. Notification to Certificateholders.



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                  (a) Upon any termination or appointment of a successor to the
Servicer pursuant to this Article VII or Section 6.04, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register and each Rating Agency.

                  (b) No later than 60 days after the occurrence of any event
which constitutes or which, with notice or a lapse of time or both, would
constitute a Servicer Event of Termination for five Business Days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence unless such default or Servicer Event of Termination shall have
been waived or cured.

                  SECTION 7.05. Survivability of Servicer Liabilities.

                  Notwithstanding anything herein to the contrary, upon
termination of the Servicer hereunder, any liabilities of the Servicer which
accrued prior to such termination shall survive such termination.




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                                  ARTICLE VIII

                                   THE TRUSTEE

                  SECTION 8.01. Duties of Trustee.

                  The Trustee, prior to the occurrence of a Servicer Event of
Termination and after the curing of all Servicer Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer has
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders.

                  No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:

                  (i) prior to the occurrence of a Servicer Event of
         Termination, and after the curing of all such Servicer Events of
         Termination which may have occurred, the duties and obligations of the
         Trustee shall be determined solely by the express provisions of this
         Agreement, the Trustee shall not be liable except for the performance
         of such duties and obligations as are specifically set forth in this
         Agreement, no implied covenants or obligations shall be read into this
         Agreement against the Trustee and, in the absence of bad faith on the
         part of the Trustee, the Trustee may conclusively rely, as to the truth
         of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee and
         conforming to the requirements of this Agreement;

                  (ii) the Trustee shall not be personally liable for an error
         of judgment made in good faith by a Responsible Officer of the Trustee,
         unless it shall be proved that the Trustee was negligent in
         ascertaining the pertinent facts;

                  (iii) the Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the Majority
         Certificateholders relating to the time, method and place of conducting
         any


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         proceeding for any remedy available to the Trustee, or exercising or
         omitting to exercise any trust or power conferred upon the Trustee,
         under this Agreement; and

                  (iv) the Trustee shall not be charged with knowledge of any
         failure by the Servicer to comply with the obligations of the Servicer
         referred to in clauses (i) and (ii) of Section 7.01(a) or of the
         existence of any Servicer Termination Event unless a Responsible
         Officer of the Trustee at the Corporate Trust Office obtains actual
         knowledge of such failure or the Trustee receives written notice of
         such failure from the Depositor, the Servicer or the Majority
         Certificateholders.

                  The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.

                  SECTION 8.02. Certain Matters Affecting the Trustee.

                  (a) Except as otherwise provided in Section 8.01:

                  (i) the Trustee may request and rely upon, and shall be
         protected in acting or refraining from acting upon, any resolution,
         Officers' Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document reasonably
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties, and the manner of obtaining consents and
         of evidencing the authorization of the execution thereof by
         Certificateholders shall be subject to such reasonable regulations as
         the Trustee may prescribe;

                  (ii) the Trustee may consult with counsel and any Opinion of
         Counsel shall be full and complete authorization and protection in
         respect of any action taken or suffered or omitted by it hereunder in
         good faith and in accordance with such Opinion of Counsel;

                  (iii) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Agreement, or to
         institute, conduct or defend any litigation hereunder or in relation
         hereto, at the request, order or direction of any of the
         Certificateholders, pursuant to the provisions of this Agreement,
         unless such Certificateholders shall have offered to the Trustee
         reasonable security or indemnity against the costs, expenses and
         liabilities which may be incurred therein or thereby; the right of the
         Trustee to perform any discretionary act enumerated in this Agreement
         shall not be construed as a duty, and the Trustee shall not be
         answerable for other than its negligence or willful misconduct in the
         performance of any such act;



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                  (iv) the Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (v) prior to the occurrence of a Servicer Event of Termination
         and after the curing of all Servicer Events of Termination which may
         have occurred, the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, consent,
         order, approval, bond or other paper or documents, unless requested in
         writing to do so by the Majority Certificateholder; provided, however,
         that if the payment within a reasonable time to the Trustee of the
         costs, expenses or liabilities likely to be incurred by it in the
         making of such investigation is, in the opinion of the Trustee, not
         reasonably assured to the Trustee by the security afforded to it by the
         terms of this Agreement, the Trustee may require reasonable indemnity
         against such cost, expense or liability as a condition to such
         proceeding. The reasonable expense of every such examination shall be
         paid by the Servicer or, if paid by the Trustee, shall be reimbursed by
         the Servicer upon demand and, if not reimbursed by the Servicer, shall
         be reimbursed by the Trust. Nothing in this clause (v) shall derogate
         from the obligation of the Servicer to observe any applicable law
         prohibiting disclosure of information regarding the Mortgagors;

                  (vi) the Trustee shall not be accountable, shall have no
         liability and makes no representation as to any acts or omissions
         hereunder of the Servicer until such time as the Trustee may be
         required to act as Servicer pursuant to Section 7.02 and thereupon only
         for the acts or omissions of the Trustee as successor Servicer;

                  (vii) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys, custodians or nominees;

                  (viii) the right of the Trustee to perform any discretionary
         act enumerated in this Agreement shall not be construed as a duty, and
         the Trustee shall not be answerable for other than its negligence or
         willful misconduct in the performance of such act;

                  (ix) the Trustee shall not be personally liable for any loss
         resulting from the investment of funds held in the Collection Account
         or the REO Account made at the direction of the Servicer pursuant to
         Section 3.12; and

                  (x) The Trustee or its Affiliates are permitted to receive
         compensation that could be deemed to be in the Trustee's economic
         self-interest for (i) serving as investment adviser, administrator,
         shareholder servicing agent, custodian or sub-custodian with respect to
         certain of the Permitted Investments, (ii) using Affiliates to effect
         transactions in certain Permitted Investments and (iii) effecting
         transactions in certain Permitted Investments. Such compensation shall
         not be considered an amount that is reimbursable or payable pursuant to
         Section 3.11.

                  SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
                                Loans.

                  The recitals contained herein and in the Certificates (other
than the authentication of the Trustee on the Certificates) shall be taken as
the statements of the Depositor, and the Trustee


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assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the signature and authentication of the Trustee on the
Certificates) or of any Mortgage Loan or related document or of MERS or the
MERS(R) System. The Trustee shall not be accountable for the use or application
by the Servicer, or for the use or application of any funds paid to the Servicer
in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Servicer. The Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust or its ability to
generate the payments to be distributed to Certificateholders under this
Agreement, including, without limitation: the existence, condition and ownership
of any Mortgaged Property; the existence and enforceability of any hazard
insurance thereon (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 7.02); the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment; the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer pursuant to Section
7.02); the compliance by the Depositor, the Originator, the Seller or the
Servicer with any warranty or representation made under this Agreement or in any
related document or the accuracy of any such warranty or representation prior to
the Trustee's receipt of notice or other discovery of any non-compliance
therewith or any breach thereof; any investment of monies by or at the direction
of the Servicer or any loss resulting therefrom, it being understood that the
Trustee shall remain responsible for any Trust property that it may hold in its
individual capacity; the acts or omissions of any of the Servicer (other than if
the Trustee shall assume the duties of the Servicer pursuant to Section 7.02),
any Sub-Servicer or any Mortgagor; any action of the Servicer (other than if the
Trustee shall assume the duties of the Servicer pursuant to Section 7.02), or
any Sub- Servicer taken in the name of the Trustee; the failure of the Servicer
or any Sub-Servicer to act or perform any duties required of it as agent of the
Trustee hereunder; or any action by the Trustee taken at the instruction of the
Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02); provided, however, that the foregoing shall not
relieve the Trustee of its obligation to perform its duties under this
Agreement, including, without limitation, the Trustee's duty to review the
Mortgage Files pursuant to Section 2.01. The Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder (unless the Trustee shall have
become the successor Servicer).

                  SECTION 8.04. Trustee May Own Certificates.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Originator, the Servicer, the Depositor or their Affiliates.

                  SECTION 8.05. Trustee Fee and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee prior to making any
distributions to Certificateholders. The Trustee, or any director, officer,
employee or agent of the Trustee, shall be


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indemnified by the Trust Fund and held harmless against any loss, liability or
expense (not including expenses and disbursements incurred or made by the
Trustee, including the compensation and the expenses and disbursements of its
agents and counsel, in the ordinary course of the Trustee's performance in
accordance with the provisions of this Agreement) incurred by the Trustee
arising out of or in connection with the acceptance or administration of its
obligations and duties under this Agreement, other than any loss, liability or
expense (i) resulting from a breach of the Servicer's obligations and duties
under this Agreement for which the Trustee is indemnified under Section 8.05(b)
or (ii) any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence of the Trustee in the performance of its
duties hereunder or by reason of the Trustee's reckless disregard of obligations
and duties hereunder or as a result of a breach of the Trustee's obligations
under Article X hereof. Any amounts payable to the Trustee, or any director,
officer, employee or agent of the Trustee, in respect of the indemnification
provided by this Section 8.05(a), or pursuant to any other right of
reimbursement from the Trust Fund that the Trustee, or any director, officer,
employee or agent of the Trustee, may have hereunder in its capacity as such,
may be withdrawn by the Trustee from the Distribution Account at any time. The
foregoing indemnity shall survive the resignation or removal of the Trustee.

                  (b) The Servicer agrees to indemnify the Trustee or any
director, officer, employee or agent of the Trustee from, and hold it harmless
against, any loss, liability or expense resulting from a breach of the
Servicer's obligations and duties under this Agreement. Such indemnity shall
survive the termination or discharge of this Agreement and the resignation or
removal of the Trustee and the Servicer for actions prior to such resignation or
removal. Any payment hereunder made by the Servicer to the Trustee shall be from
the Servicer's own funds, without reimbursement from the Trust Fund therefor.

                  SECTION 8.06. Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be an entity duly
organized and validly existing under the laws of the United States of America or
any state thereof, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
entity publishes reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, then for
the purposes of this Section 8.06, the combined capital and surplus of such
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The principal office of the
Trustee (other than the initial Trustee) shall be in a state with respect to
which an Opinion of Counsel has been delivered to such Trustee at the time such
Trustee is appointed Trustee to the effect that the Trust will not be a taxable
entity under the laws of such state. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.06, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07.

                  SECTION 8.07. Resignation or Removal of Trustee.

                  The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Servicer and each Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Trustee by


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written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If no
successor Trustee shall have been so appointed and having accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor or the Servicer may remove the Trustee. If the Depositor or the
Servicer removes the Trustee under the authority of the immediately preceding
sentence, the Depositor shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.

                  The Majority Certificateholders may at any time remove the
Trustee by written instrument or instruments delivered to the Servicer, the
Depositor and the Trustee; the Depositor shall thereupon use its best efforts to
appoint a successor trustee in accordance with this Section.

                  Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.

                  SECTION 8.08. Successor Trustee.

                  Any successor Trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the Servicer and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective, and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Depositor, the Servicer and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.

                  No successor Trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 and the appointment of
such successor Trustee shall not result in a downgrading of the Regular
Certificates by either Rating Agency, as evidenced by a letter from each Rating
Agency.

                  Upon acceptance of appointment by a successor Trustee as
provided in this Section 8.08, the successor Trustee shall mail notice of the
appointment of a successor Trustee hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register and to each Rating Agency.


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                  SECTION 8.09. Merger or Consolidation of Trustee.

                  Any entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or any Mortgaged Property may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be subject
to the written approval of the Servicer. If the Servicer shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, or in the case a Servicer Event of Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06, and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08. The Servicer shall be responsible for the
fees of any co-trustee or separate trustee appointed hereunder.

                  Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:

                  (i) all rights, powers, duties and obligations conferred or
         imposed upon the Trustee shall be conferred or imposed upon and
         exercised or performed by the Trustee and such separate trustee or
         co-trustee jointly (it being understood that such separate trustee or
         co-trustee is not authorized to act separately without the Trustee
         joining in such act), except to the extent that under any law of any
         jurisdiction in which any particular act or acts are to be performed
         (whether as Trustee hereunder or as successor to the Servicer
         hereunder), the Trustee shall be incompetent or unqualified to perform
         such act or acts, in which event such rights, powers, duties and
         obligations (including the holding of title to the Trust or any portion
         thereof in any such jurisdiction) shall be exercised and performed
         singly by such separate trustee or co-trustee, but solely at the
         direction of the Trustee;

                  (ii) no trustee hereunder shall be held personally liable by
         reason of any act or omission of any other trustee hereunder; and



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                  (iii) the Servicer and the Trustee, acting jointly, may at any
         time accept the resignation of or remove any separate trustee or
         co-trustee except that following the occurrence of a Servicer Event of
         Termination, the Trustee acting alone may accept the resignation or
         remove any separate trustee or co-trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor and the Servicer.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.

                  SECTION 8.11. Limitation of Liability.

                  The Certificates are executed by the Trustee, not in its
individual capacity but solely as Trustee of the Trust, in the exercise of the
powers and authority conferred and vested in it by the Trust Agreement. Each of
the undertakings and agreements made on the part of the Trustee in the
Certificates is made and intended not as a personal undertaking or agreement by
the Trustee but is made and intended for the purpose of binding only the Trust.

                  SECTION 8.12. Trustee May Enforce Claims Without Possession of
                                Certificates.

                  (a) All rights of action and claims under this Agreement or
the Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.

                  (b) The Trustee shall afford the Seller, the Depositor, the
Servicer and each Certificateholder upon reasonable prior notice during normal
business hours, access to all records maintained by the Trustee in respect of
its duties hereunder and access to officers of the Trustee responsible for
performing such duties. Upon request, the Trustee shall furnish the Depositor,
the


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Servicer and any requesting Certificateholder with its most recent financial
statements. The Trustee shall cooperate fully with the Seller, the Servicer, the
Depositor and such Certificateholder and shall make available to the Seller, the
Servicer, the Depositor and such Certificateholder for review and copying such
books, documents or records as may be requested with respect to the Trustee's
duties hereunder. The Seller, the Depositor, the Servicer and the
Certificateholders shall not have any responsibility or liability for any action
or failure to act by the Trustee and are not obligated to supervise the
performance of the Trustee under this Agreement or otherwise.

                  SECTION 8.13. Suits for Enforcement.

                  In case a Servicer Event of Termination or other default by
the Servicer or the Depositor hereunder shall occur and be continuing, the
Trustee, shall, at the direction of the Majority Certificateholders, or may,
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.

                  SECTION 8.14. Waiver of Bond Requirement.

                  The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee post a bond or other surety with
any court, agency or body whatsoever.

                  SECTION 8.15. Waiver of Inventory, Accounting and Appraisal
                                Requirement.

                  The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.




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                                   ARTICLE IX

                              REMIC ADMINISTRATION

                  SECTION 9.01. REMIC Administration.

                  (a) REMIC elections as set forth in the Preliminary Statement
shall be made by the Trustee on Form 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. The regular interests and residual
interest in each REMIC shall be as designated in the Preliminary Statement.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of each REMIC within the meaning of section 860G(a)(9) of the Code.

                  (c) The Trustee shall pay any and all expenses relating to any
tax audit of any REMIC (including, but not limited to, any professional fees or
any administrative or judicial proceedings with respect to any REMIC that
involve the Internal Revenue Service or state tax authorities), including the
expense of obtaining any tax related Opinion of Counsel. The Trustee shall be
entitled to reimbursement of expenses incurred pursuant to this Section 9.01(c)
to the extent provided in Section 8.05.

                  (d) The Trustee shall prepare, sign and file, all of the
REMICs' federal and state tax and information returns (including Form 8811) as
the direct representative each REMIC created hereunder. The expenses of
preparing and filing such returns shall be borne by the Trustee.

                  (e) The Holder of the Class R Certificate at any time holding
the largest Percentage Interest thereof shall be the "tax matters person" as
defined in the REMIC Provisions (the related "Tax Matters Person") with respect
to REMIC 1, REMIC 2 and REMIC 3 and shall act as Tax Matters Person for each
such REMIC. The Trustee, as agent for the Tax Matters Person, shall perform on
behalf of each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Trustee, as agent for the Tax Matters
Person, shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any disqualified person or organization
and (ii) to the Certificateholders such information or reports as are required
by the Code or REMIC Provisions. The Trustee, as agent for the Tax Matters
Person, shall represent each REMIC in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of any REMIC, enter
into settlement agreements with any government taxing agency, extend any statute
of limitations relating to any item of any REMIC and otherwise act on behalf of
any REMIC in relation to any tax matter involving the Trust.

                  (f) The Trustee, the Servicer and the Holders of Certificates
shall take any action or cause any REMIC to take any action necessary to create
or maintain the status of each REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or


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maintain such status. Neither the Trustee, the Servicer nor the Holder of any
Residual Certificate shall take any action, cause any REMIC created hereunder to
take any action or fail to take (or fail to cause to be taken) any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of such REMIC as a REMIC or (ii) result in the imposition of
a tax upon such REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the Code) (either such event, an
"Adverse REMIC Event") unless the Trustee and the Servicer have received an
Opinion of Counsel (at the expense of the party seeking to take such action) to
the effect that the contemplated action will not endanger such status or result
in the imposition of such a tax. In addition, prior to taking any action with
respect to any REMIC created hereunder or the assets therein, or causing such
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, any Holder of a Residual Certificate will consult with the
Trustee and the Servicer, or their respective designees, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any REMIC, and no such Person shall take any such action or cause any
REMIC to take any such action as to which the Trustee or the Servicer has
advised it in writing that an Adverse REMIC Event could occur.

                  (g) Each Holder of a Residual Certificate shall pay when due
any and all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by a
Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC. Subject
to the foregoing, in the event that a REMIC incurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC is
domiciled in the State of California for state tax purposes by virtue of the
location of the Servicer, the Servicer agrees to pay on behalf of such REMIC
when due, any and all state and local taxes imposed as a result of such a
determination, in the event that the Holder of the related Residual Certificate
fails to pay such taxes, if any, when imposed.

                  (h) The Trustee, as agent for the Tax Matters Person, shall,
for federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.

                  (i) No additional contributions of assets shall be made to any
REMIC created hereunder, except as expressly provided in this Agreement with
respect to eligible substitute mortgage loans.

                  (j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.

                  (k) [Reserved].

                  (l) The Trustee will apply for an Employee Identification
Number from the Internal Revenue Service via a Form SS-4 or other acceptable
method for all tax entities and shall complete the Form 8811.


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                  SECTION 9.02. Prohibited Transactions and Activities.

                  Neither the Depositor, the Servicer nor the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC created
hereunder pursuant to Article X of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a repurchase of Mortgage Loans pursuant
to Article II of this Agreement, nor acquire any assets for any REMIC, nor sell
or dispose of any investments in the Distribution Account for gain, nor accept
any contributions to either REMIC after the Closing Date, unless it has received
an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of any REMIC created
hereunder as a REMIC or of the interests therein other than the Residual
Certificates as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of the
assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (d) cause any REMIC created hereunder to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.

                  SECTION 9.03. Indemnification with Respect to Certain Taxes
                                and Loss of REMIC Status.

                  (a) In the event that any REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Trustee and the
Trust Fund against any and all losses, claims, damages, liabilities or expenses
("Losses") resulting from such negligence; provided, however, that the Servicer
shall not be liable for any such Losses attributable to the action or inaction
of the Trustee, the Depositor or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual Certificate on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Servicer of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).

                  (b) In the event that any REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Trustee of its duties and
obligations set forth herein, the Trustee shall indemnify the Trust Fund against
any and all Losses resulting from such negligence; provided, however, that the
Trustee shall not be liable for any such Losses attributable to the action or
inaction of the Servicer, the Depositor or the Holder of such Residual
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which the
Trustee has relied. The foregoing


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shall not be deemed to limit or restrict the rights and remedies of the Holder
of such Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Trustee have any
liability (1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any Losses other than arising out of a
negligent performance by the Trustee of its duties and obligations set forth
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).




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                                    ARTICLE X

                                   TERMINATION

                  SECTION 10.01. Termination.

                  (a) The respective obligations and responsibilities of the
Servicer, the Depositor and the Trustee created hereby (other than the
obligation of the Trustee to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Servicer to send certain
notices as hereinafter set forth) shall terminate upon notice to the Trustee
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the optional purchase by the Servicer of the Mortgage Loans as described
below, (iv) the Distribution Date in September 2033 and (v) direction by the
Holders of each Class of Regular Certificates evidencing Percentage Interests
aggregating not less than 100%, with the consent of the Servicer.
Notwithstanding the foregoing, in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late ambassador of the United
States to the Court of St. James's, living on the date hereof.

                  The Holders of a majority in Percentage Interest in the Class
C Certificates (unless any such Holder constituting such majority is the Seller,
Greenwich Capital Markets, Inc. or an Affiliate of either of them), or if such
Holders fail to exercise such option or if any such Holder constituting such
majority is the Seller, Greenwich Capital Markets, Inc. or an Affiliate of
either of them, the Servicer (with the written consent of the Depositor or an
Affiliate thereof, such consent not to be unreasonably withheld) (either such
majority Holders or the Servicer, as applicable, the "Terminator"), may, at its
option, terminate this Agreement on any date on which the aggregate of the
Stated Principal Balances of the Mortgage Loans (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) on such date is equal to or less than 10% of the
aggregate Stated Principal Balances of the Original Mortgage Loans on the Cut-
off Date, by purchasing, on the next succeeding Distribution Date, all of the
outstanding Mortgage Loans and REO Properties at a price equal to the greater of
(i) the Stated Principal Balance of the Mortgage Loans (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and the appraised value of the REO Properties and
(ii) fair market value of the Mortgage Loans and REO Properties (as determined
and as agreed upon as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to the
related Certificateholders pursuant to Section 10.01(c) by (x) the Servicer, if
it is the Terminator, (y) the Holders of a majority in Percentage Interest in
the Class C Certificates and (z) if the Class A Certificates or a Class of
Mezzanine Certificates will not receive all amounts owed to it as a result of
the termination, the Trustee, provided that if this clause (z) applies to such
determination, such determination shall be based solely upon an appraisal
obtained as provided in the last sentence of this paragraph), plus accrued and
unpaid interest thereon at the weighted average of the Mortgage Rates through
the end of the Due Period preceding the final Distribution Date plus
unreimbursed Servicing Advances, Advances, any unpaid Servicing Fees


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allocable to such Mortgage Loans and REO Properties and any accrued and unpaid
Net WAC Rate Carryover Amounts (the "Termination Price"); provided, however,
such option may only be exercised if the Termination Price is sufficient to
result in the payment of all interest accrued on, as well as amounts necessary
to retire the principal balance of, each class of notes secured primarily by the
Class C Certificates and issued by a Delaware statutory trust pursuant to the
Indenture between such issuer and the Trustee as indenture trustee. If the
determination of the fair market value of the Mortgage Loans and REO Properties
shall be required to be made and agreed upon by the Servicer, if it is the
Terminator, the Holders of a majority in Percentage Interest in the Class C
Certificates and the Trustee as provided in (ii) above, such determination shall
be based on an appraisal of the value of the Mortgage Loans and REO Properties
conducted by an independent appraiser mutually agreed upon by the Servicer, if
it is the Terminator, the Holders of a majority in Percentage Interest in the
Class C Certificates and the Trustee in their reasonable discretion, and (A)
such appraisal shall be obtained at no expense to the Trustee and (B) the
Trustee may conclusively rely on, and shall be protected in relying on, such
appraisal.

                  In connection with any such purchase pursuant to the preceding
paragraph, the Terminator shall deposit in the Distribution Account all amounts
then on deposit in the Collection Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.

                  Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price.

                  (b) Notice of any termination, specifying the Distribution
Date (which shall be a date that would otherwise be a Distribution Date) upon
which the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Terminator,
by letter to the Certificate Insurer and to the Certificateholders mailed not
earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying (1) the Distribution
Date upon which final distribution of the Certificates will be made upon
presentation and surrender of such Certificates at the office or agency of the
Trustee therein designated, (2) the amount of any such final distribution and
(3) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified.

                  (c) Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date. By acceptance of the Residual Certificates, the Holders of
the Residual Certificates agree, in connection with any termination hereunder,
to assign and transfer any amounts in excess of the par value of the Mortgage
Loans, and to the extent received in respect of such termination, to pay any
such amounts to the Holders of the Class C Certificates.

                  (d) In the event that all Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before
such final Distribution Date, the Trustee shall promptly


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following such date cause all funds in the Distribution Account not distributed
in final distribution to Certificateholders to be withdrawn therefrom and
credited to the remaining Certificateholders by depositing such funds in a
separate Servicing Account for the benefit of such Certificateholders, and the
Servicer (if the Servicer has exercised its right to purchase the Mortgage
Loans) or the Trustee (in any other case) shall give a second written notice to
the remaining Certificateholders, to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
nine months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Residual Certificateholders shall be entitled
to all unclaimed funds and other assets which remain subject hereto, and the
Trustee upon transfer of such funds shall be discharged of any responsibility
for such funds, and the Certificateholders shall look to the Residual
Certificateholders for payment.

                  SECTION 10.02. Additional Termination Requirements.

                  (a) In the event that the Terminator exercises its purchase
         option as provided in Section 10.01, each REMIC shall be terminated in
         accordance with the following additional requirements, unless the
         Trustee shall have been furnished with an Opinion of Counsel to the
         effect that the failure of the Trust to comply with the requirements of
         this Section will not (i) result in the imposition of taxes on
         "prohibited transactions" of the Trust as defined in Section 860F of
         the Code or (ii) cause any REMIC constituting part of the Trust Fund to
         fail to qualify as a REMIC at any time that any Certificates are
         outstanding:

                  (i) Within 90 days prior to the final Distribution Date, the
         Terminator shall adopt and the Trustee shall sign a plan of complete
         liquidation of each REMIC created hereunder meeting the requirements of
         a "Qualified Liquidation" under Section 860F of the Code and any
         regulations thereunder (as evidenced by an Opinion of Counsel); and

                  (ii) At or after the time of adoption of such a plan of
         complete liquidation and at or prior to the final Distribution Date,
         the Trustee shall sell all of the assets of the Trust Fund to the
         Terminator for cash pursuant to the terms of the plan of complete
         liquidation.

                  (b) In the event that the Trust is terminated pursuant to
         Section 10.01(a)(v), the Trustee shall be furnished with an Opinion of
         Counsel to the effect that the termination satisfies the requirements
         of Treasury Regulation Section 1.860F-1.

                  (c) By their acceptance of Certificates, the Holders thereof
         hereby agree to appoint the Trustee as their attorney in fact to: (i)
         adopt such a plan of complete liquidation (and the Certificateholders
         hereby appoint the Trustee as their attorney in fact to sign such plan)
         as appropriate and (ii) to take such other action in connection
         therewith as may be reasonably required to carry out such plan of
         complete liquidation all in accordance with the terms hereof.



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                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01. Amendment.

                  This Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee; and without the consent of the
Certificateholders (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein (iii) to amend the provisions of Section 3.22(b) or (iv) to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided that such action shall not adversely affect in any material
respect the interests of any Certificateholder as evidenced by either (a) an
Opinion of Counsel delivered to the Trustee or (b) written notice to the
Depositor, the Servicer and the Trustee from the Rating Agencies that such
action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency.
No amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel or Rating Agency confirmation shall be required to address
the effect of any such amendment on any such consenting Certificateholder.
Notwithstanding the foregoing, neither an Opinion of Counsel or written notice
to the Depositor, the Servicer and the Trustee from the Rating Agencies will be
required in connection with an amendment to the provisions of Section 3.22(b).

                  In addition, this Agreement may be amended from time to time
by the Depositor, the Servicer and the Trustee with the consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates or distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (y) adversely affect in any material respect the
interests of the Holders of any Class of Certificates (as evidenced by either
(i) an Opinion of Counsel delivered to the Trustee or (ii) written notice to the
Depositor, the Servicer and the Trustee from the Rating Agencies that such
action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency)
in a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies.

                  Notwithstanding any provision of this Agreement to the
contrary, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel, delivered by (and at
the expense of) the Person seeking such Amendment, to the effect that such
amendment will not result in the imposition of a tax on any REMIC created
hereunder constituting part of the Trust Fund pursuant to the REMIC Provisions
or cause any REMIC created


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hereunder constituting part of the Trust to fail to qualify as a REMIC at any
time that any Certificates are outstanding and that the amendment is being made
in accordance with the terms hereof.

                  Promptly after the execution of any such amendment the Trustee
shall furnish, at the expense of the Person that requested the amendment if such
Person is the Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer
and each Rating Agency.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment; instead it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.

                  The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.

                  SECTION 11.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the expense of the Trust, but only upon direction of
Certificateholders accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.

                  SECTION 11.03. Limitation on Rights of Certificateholders.

                  The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                  Except as expressly provided for herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or


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members of an association; nor shall any Certificateholder be under any
liability to any third person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

                  SECTION 11.04. Governing Law; Jurisdiction.

                  This Agreement shall be construed in accordance with the laws
of the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws. With respect
to any claim arising out of this Agreement, each party irrevocably submits to
the exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.

                  SECTION 11.05. Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, by facsimile or by express
delivery service, to (a) in the case of the Servicer, The Provident Bank, One
East Fourth Street, Cincinnati, Ohio 45202, Attention: PCFS Legal Department
(telecopy number: (513) 763-8027), or such other address or telecopy number as
may hereafter be furnished to the Depositor and the Trustee in writing by the
Servicer, (b) in the case of the Trustee, Deutsche Bank National Trust Company,
1761 East St. Andrew Place, Santa Ana, California 92705-4934, Attention: GC03M1
(telecopy number: (714) 247-6329), or such other address or telecopy number


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as may hereafter be furnished to the Depositor and the Servicer in writing by
the Trustee, and (c) in the case of the Depositor, Financial Asset Securities
Corp., 600 Steamboat Road, Greenwich, Connecticut 06830, Attention: Legal, or
such other address as may be furnished to the Servicer and the Trustee in
writing by the Depositor. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Servicer Event of Termination shall be given by telecopy and by certified mail.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.

                  SECTION 11.06. Severability of Provisions.

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

                  SECTION 11.07. Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.08. Notice to the Rating Agencies.

                  (a) Each of the Trustee and the Servicer shall be obligated to
         use its best reasonable efforts promptly to provide notice to the
         Rating Agencies with respect to each of the following of which a
         Responsible Officer of the Trustee or Servicer, as the case may be, has
         actual knowledge:

                  (i) any material change or amendment to this Agreement;

                  (ii) the occurrence of any Servicer Event of Termination that
         has not been cured or waived;

                  (iii) the resignation or termination of the Servicer or the
         Trustee;

                  (iv) the final payment to Holders of the Certificates of any
         Class;

                  (v) any change in the location of any Account; and

                  (vi) if the Trustee is acting as successor Servicer pursuant
         to Section 7.02 hereof, any event that would result in the inability of
         the Trustee to make Advances.



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                  (b) In addition, the Trustee shall promptly make available to
         each Rating Agency copies of each Statement to Certificateholders
         described in Sections 4.03 and 3.19 hereof and the Servicer shall
         promptly furnish to each Rating Agency copies of the following:

                  (i) each annual statement as to compliance described in
         Section 3.20 hereof;

                  (ii) each annual independent public accountants' servicing
         report described in Section 3.21 hereof; and

                  (iii) each notice delivered pursuant to Section 7.01(a) hereof
         which relates to the fact that the Servicer has not made an Advance.

                  Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
(i) Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007,
(ii) Standard & Poor's, a division of The McGraw-Hill Companies, Inc., 55 Water
Street, 41st Floor, New York, NY 10041, Attention: Residential Mortgage
Surveillance Group and (iii) Fitch Ratings, One State Street Plaza, New York,
New York 10004.

                  SECTION 11.09. Further Assurances.

                  Notwithstanding any other provision of this Agreement, neither
the Regular Certificateholders nor the Trustee shall have any obligation to
consent to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.

                  SECTION 11.10. Benefits of Agreement.

                  Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.

                  SECTION 11.11 Acts of Certificateholders.

                  (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing, and such action shall become
effective when such instrument or instruments are delivered to the Trustee and
the Servicer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "act" of the
Certificateholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 11.11.



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                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.

                  (c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind every future
Holder of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.




                                       139

<PAGE>



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

                                              FINANCIAL ASSET SECURITIES CORP.,
                                              as Depositor


                                              By: /s/ Frank Skibo
                                                  -----------------------------
                                              Name:   Frank Skibo
                                              Title:  Senior Vice President


                                              THE PROVIDENT BANK, as Servicer


                                              By: /s/ David Friedman
                                                  -----------------------------
                                              Name:   David Friedman
                                              Title:  Senior Vice President



                                              DEUTSCHE BANK NATIONAL TRUST
                                              COMPANY, as Trustee


                                              By: /s/ Barbara Campbell
                                                  -----------------------------
                                              Name:   Barbara Campbell
                                              Title:  Assistant Vice President

                                              By: /s/ Ronaldo Reyes
                                                  -----------------------------
                                              Name:   Ronaldo Reyes
                                              Title:  Assistant Vice President



<PAGE>



STATE OF                   )
                           ) ss.:
COUNTY OF                  )

                  On the ___th day of December, 2003 before me, a notary public
in and for said State, personally appeared _______________ known to me to be a
______________ of Financial Asset Securities Corp., a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        _______________________
                                                             Notary Public






<PAGE>



STATE OF                   )
                           ) ss.:
COUNTY OF                  )

                  On the ___th day of December, 2003 before me, a notary public
in and for said State, personally appeared _______________ known to me to be a
_______________ of The Provident Bank, a corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        _______________________
                                                             Notary Public




<PAGE>


STATE OF                   )
                           ) ss.:
COUNTY OF                  )

                  On the ___th day of December, 2003 before me, a notary public
in and for said State, personally appeared __________________, known to me to be
an _____________________ of Deutsche Bank National Trust Company, a
____________________ that executed the within instrument, and also known to me
to be the person who executed it on behalf of said association, and acknowledged
to me that such corporation executed the within instrument.

                  On the ___th day of December, 2003 before me, a notary public
in and for said State, personally appeared __________________, known to me to be
an _____________________ of Deutsche Bank National Trust Company, a
____________________ that executed the within instrument, and also known to me
to be the person who executed it on behalf of said association, and acknowledged
to me that such corporation executed the within instrument.


                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.


                                                        _______________________
                                                             Notary Public

<PAGE>

                                   EXHIBIT A-1

                         FORM OF CLASS I-A1 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $204,813,000.00

Original Class Certificate

Principal Balance of this Class                 :     $204,813,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AA 9

Class                                           :     I-A1

Assumed Maturity Date                           :     November 2033




                                      A-1-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                   Class I-A1

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
I-A1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-A1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class I-A1 Certificate (obtained by
dividing the Denomination of this Class I-A1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class I-A1 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class I-A1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class I-A1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-1-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                          MERITAGE MORTGAGE LOAN TRUST 2003-1

                                          DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                          not in its individual capacity, but
                                          solely as Trustee


                                          By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee



                                      A-1-3

<PAGE>



                       [Reverse of Class I-A1 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized


                                      A-1-4

<PAGE>



denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-1-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-1-7

<PAGE>



                                   EXHIBIT A-2

                        FORM OF CLASS II-A2 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $26,883,000.00

Original Class Certificate
Principal Balance of this Class                 :     $26,883,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AB 7

Class                                           :     II-A2

Assumed Maturity Date                           :     November 2033




                                      A-2-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                   Class II-A2

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-A2 Certificate (obtained by
dividing the Denomination of this Class II-A2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class II-A2 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class II-A2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class II-A2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-2-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee



                                      A-2-3

<PAGE>



                      [Reverse of Class II-A2 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized


                                      A-2-4

<PAGE>



denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-2-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-2-7

<PAGE>



                                   EXHIBIT A-3

                         FORM OF CLASS M-1 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $20,115,000.00

Original Class Certificate
Principal Balance of this Class                 :     $20,115,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AC 5

Class                                           :     M-1

Assumed Maturity Date                           :     November 2033



                                      A-3-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-1

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-1 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-1 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-3-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee


                                      A-3-3

<PAGE>



                       [Reverse of Class M-1 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized


                                      A-3-4

<PAGE>



denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-3-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-3-7

<PAGE>



                                   EXHIBIT A-4

                         FORM OF CLASS M-2 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE CLASS M-1
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $16,390,000.00

Original Class Certificate
Principal Balance of this Class                 :     $16,390,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AD 3

Class                                           :     M-2

Assumed Maturity Date                           :     November 2033



                                      A-4-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-2

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-2 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-2 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-4-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee


                                      A-4-3

<PAGE>



                       [Reverse of Class M-2 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized


                                      A-4-4

<PAGE>



denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-4-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-4-7

<PAGE>



                                   EXHIBIT A-5


                         FORM OF CLASS M-3 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $5,215,000.00

Original Class Certificate
Principal Balance of this Class                 :     $5,215,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AE 1

Class                                           :     M-3

Assumed Maturity Date                           :     November 2033



                                      A-5-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-3

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-3 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-3 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-5-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee


                                      A-5-3

<PAGE>



                       [Reverse of Class M-3 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized


                                      A-5-4

<PAGE>



denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-5-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.






                                      A-5-7

<PAGE>



                                   EXHIBIT A-6


                         FORM OF CLASS M-4 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $4,470,000.00

Original Class Certificate
Principal Balance of this Class                 :     $4,470,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AF 8

Class                                           :     M-4

Assumed Maturity Date                           :     November 2033



                                      A-6-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-4

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable- rate and
         fixed- rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-4 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-4 Certificate (obtained by
dividing the Denomination of this Class M-4 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-4 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-4 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         Reference is hereby made to the further provisions of this Class M-4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-4 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-6-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee






                                      A-6-3

<PAGE>



                       [Reverse of Class M-4 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust will be issued to the designated transferee or
transferees.


                                      A-6-4

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-6-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.



                                      A-6-7

<PAGE>



                                   EXHIBIT A-7


                         FORM OF CLASS M-5 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES AND THE
CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $4,470,000.00

Original Class Certificate
Principal Balance of this Class                 :     $4,470,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AG 6

Class                                           :     M-5

Assumed Maturity Date                           :     November 2033



                                      A-7-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-5

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-5 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-5
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-5 Certificate (obtained by
dividing the Denomination of this Class M-5 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-5 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-5 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         Reference is hereby made to the further provisions of this Class M-5
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-5 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-7-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee




                                      A-7-3

<PAGE>



                       [Reverse of Class M-5 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust will be issued to the designated transferee or
transferees.


                                      A-7-4

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-7-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.



                                      A-7-7

<PAGE>



                                   EXHIBIT A-8

                         FORM OF CLASS M-6 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATE, THE CLASS
M-4 CERTIFICATES AND THE CLASS M-5 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $5,215,000.00

Original Class Certificate
Principal Balance of this Class                 :     $5,215,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AH 4

Class                                           :     M-6

Assumed Maturity Date                           :     November 2033



                                      A-8-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-6

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-6 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-6
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-6 Certificate (obtained by
dividing the Denomination of this Class M-6 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-6 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-6 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         Reference is hereby made to the further provisions of this Class M-6
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-6 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-8-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee




                                      A-8-3

<PAGE>



                       [Reverse of Class M-6 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust will be issued to the designated transferee or
transferees.


                                      A-8-4

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-8-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-8-7

<PAGE>



                                   EXHIBIT A-9

                         FORM OF CLASS M-7 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATE, THE CLASS
M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES AND THE CLASS M-6 CERTIFICATES TO
THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $2,980,000.00

Original Class Certificate
Principal Balance of this Class                 :     $2,980,000.00

Percentage Interest                             :     100.00%

Pass-Through Rate                               :     Variable

CUSIP                                           :     59001F AJ 0

Class                                           :     M-7

Assumed Maturity Date                           :     November 2033



                                                       A-9-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-7

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-7 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-7
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-7 Certificate (obtained by
dividing the Denomination of this Class M-7 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2003 (the "Agreement") among the
Depositor, The Provident Bank, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-7 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-7 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         Reference is hereby made to the further provisions of this Class M-7
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-7 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-9-2

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee






                                      A-9-3

<PAGE>



                       [Reverse of Class M-7 Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee as
provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust will be issued to the designated transferee or
transferees.


                                      A-9-4

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-9-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.



                                      A-9-7

<PAGE>



                                  EXHIBIT A-10

                          FORM OF CLASS C CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE MEZZANINE
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $7,455,789.49

Original Class Certificate
Principal Balance of this Class                 :     $7,455,789.49

Percentage Interest                             :     100.00%

Class                                           :     C





                                      A-9-8

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                     Class C

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Greenwich Capital Financial Products, Inc. is the
registered owner of the Percentage Interest evidenced by this Class C
Certificate (obtained by dividing the Denomination of this Class C Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of December 1, 2003 (the
"Agreement") among the Depositor, The Provident Bank, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class C Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.



                                      A-9-9

<PAGE>



         This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.



                                     A-9-10

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee




                                     A-9-11

<PAGE>



                        [Reverse of Class C Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
as provided in the Pooling and Servicing Agreement accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust will be issued to the designated transferee or
transferees.


                                     A-9-12

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-9-13

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.


                                     A-9-15

<PAGE>



                                  EXHIBIT A-10

                           FORM OF CLASS P CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Initial Certificate Principal Balance
of this Certificate ("Denomination")            :     $100.00

Original Class Certificate
Principal Balance of this Class                 :     $100.00

Percentage Interest                             :     100.00%

Class                                           :     P



                                     A-10-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                     Class P

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien and second lien adjustable-rate and
         fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.

         This certifies that Greenwich Capital Financial Products, Inc. is the
registered owner of the Percentage Interest evidenced by this Class P
Certificate (obtained by dividing the Denomination of this Class P Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of December 1, 2003 (the
"Agreement") among the Depositor, The Provident Bank, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class P Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Class P Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.



                                     A-10-2

<PAGE>



         Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-10-3

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee




                                     A-10-4

<PAGE>



                        [Reverse of Class P Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or agency of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.



                                     A-10-5

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust and (iii) the Distribution
Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-10-6

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.


                                     A-10-8

<PAGE>



                                  EXHIBIT A-11

                          FORM OF CLASS R CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.                                 :     1

Cut-off Date                                    :     December 1, 2003

First Distribution Date                         :     January 26, 2004

Percentage Interest                             :     100.00%

Class                                           :      R



                                     A-11-1

<PAGE>



                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                     Class R

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting primarily of a pool of first lien and second lien
         adjustable-rate and fixed-rate mortgage loans (the "Mortgage Loans")

                 FINANCIAL ASSET SECURITIES CORP., as Depositor

         This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.

         This certifies that Greenwich Capital Markets, Inc. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 1,
2003 (the "Agreement") among the Depositor, The Provident Bank, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

         This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office of the Trustee.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.

         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this


                                     A-11-2

<PAGE>



Certificate may be transferred without delivery to the Trustee of (a) a transfer
affidavit of the proposed transferee and (b) a transfer certificate of the
transferor, each of such documents to be in the form described in the Agreement,
(iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.




                                     A-11-3

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: December __, 2003

                                         MERITAGE MORTGAGE LOAN TRUST 2003-1

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         not in its individual capacity, but
                                         solely as Trustee


                                         By:_________________________________


This is one of the Certificates referenced
in the within-mentioned Agreement


By:__________________________________________
         Authorized Signatory of
         Deutsche Bank National Trust Company,
         as Trustee




                                     A-11-4

<PAGE>



                        [Reverse of Class R Certificate]

                       Meritage Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.


                                     A-11-5

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.

         On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Terminator may purchase, in whole, from the Trust the Mortgage Loans
at a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust and (iii)
the Distribution Date in November 2033.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                     A-11-6

<PAGE>



                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                  (Please print or typewrite name and address
                     including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________

Dated:_________________

                                           _____________________________________
                                           Signature by or on behalf of assignor





<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.


                                     A-11-8

<PAGE>



                                    EXHIBIT B

                                   [RESERVED]


                                     A-12-1

<PAGE>



                                    EXHIBIT C

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT





                                       C-1

<PAGE>

                         MERITAGE MORTGAGE CORPORATION,

                                  as Originator


                   GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,

                                    as Seller


                                       and


                        FINANCIAL ASSET SECURITIES CORP.,

                                  as Purchaser




                        MORTGAGE LOAN PURCHASE AGREEMENT

                          Dated as of December 23, 2003


                  Adjustable-Rate and Fixed-Rate Mortgage Loans

                       Meritage Mortgage Loan Trust 2003-1





<PAGE>



<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>

ARTICLE I.

DEFINITIONS
         Section 1.01      Definitions............................................................................2

ARTICLE II.

SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
         Section 2.01      Sale of Mortgage Loans.................................................................3
         Section 2.02      Obligations of the Seller and Seller Upon Sale.........................................3
         Section 2.03      Payment of Purchase Price for the Mortgage Loans.......................................5

ARTICLE III.

REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
         Section 3.01      Originator Representations and Warranties Relating to the Mortgage Loans
                   ...............................................................................................6
         Section 3.02      Originator Representations and Warranties Relating to the Originator...................6
         Section 3.03      Seller Representations and Warranties Relating to the Seller...........................7
         Section 3.04      Remedies for Breach of Representations and Warranties..................................9

ARTICLE IV.

ORIGINATOR'S AND SELLER'S COVENANTS
         Section 4.01      Covenants of the Originator and the Seller............................................11
         Section 5.01      Indemnification.......................................................................12

ARTICLE VI.

TERMINATION
         Section 6.01      Termination...........................................................................15

ARTICLE VII.

MISCELLANEOUS PROVISIONS
         Section 7.01      Amendment.............................................................................15
         Section 7.02      Governing Law.........................................................................15
         Section 7.03      Notices. .............................................................................15
         Section 7.05      Counterparts..........................................................................15
         Section 7.06      Further Agreements....................................................................16
         Section 7.07      Intention of the Parties..............................................................16
         Section 7.08      Successors and Assigns; Assignment of Purchase Agreement..............................16
         Section 7.09      Survival..............................................................................17
</TABLE>


                                                         i

<PAGE>



                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 23,
2003 (the "Agreement"), among Meritage Mortgage Corporation (the "Originator"),
Greenwich Capital Financial Products, Inc. (the "Seller") and Financial Asset
Securities Corp. (the "Purchaser").

                                   WITNESSETH
                                   ----------

                  WHEREAS, the Seller is the owner of (a) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below and (b) the other documents or instruments constituting
the Mortgage File (collectively, the "Mortgage Loans"); and

                  WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the "Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and

                  WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and

                  WHEREAS, the Originator originated the Mortgage Loans and
previously sold the Mortgage Loans; and

                  WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement dated as of December 1, 2003 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, The Provident Bank, as servicer and Deutsche
Bank National Trust Company as trustee (the "Trustee"), the Purchaser will
convey the Mortgage Loans to Meritage Mortgage Loan Trust 2003-1 (the "Trust");
and

                  WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself and the Mortgage Loans.

                  NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

         Section 1.01 Definitions. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.




<PAGE>

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

         Section 2.01 Sale of Mortgage Loans. The Seller, concurrently with the
execution and delivery of this Agreement, does hereby sell, assign, set over,
and otherwise convey to the Purchaser, without recourse, (i) all of its right,
title and interest in and to each Mortgage Loan, including the related Cut-off
Date Principal Balance, all interest accruing thereon on or after the Cut-off
Date and all collections in respect of interest and principal due after the
Cut-off Date; (ii) property which secured such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans, (iv) the right to
receive any amounts under the Cap Contract and (v) all proceeds of any of the
foregoing.

         Section 2.02 Obligations of the Originator and Seller Upon Sale. In
connection with any transfer pursuant to Section 2.01 hereof, the Seller further
agrees, at its own expense on or prior to the Closing Date, (a) to cause its
books and records to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement and (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such Mortgage Loan, as of the Cut-off Date, (i) its
account number and (ii) the Cut-off Date Principal Balance. Such file, which
forms a part of Exhibit C to the Pooling and Servicing Agreement, shall also be
marked as Schedule I to this Agreement and is hereby incorporated into and made
a part of this Agreement.

                  In connection with any conveyance by the Seller, the Seller
shall on behalf of the Purchaser, and with the cooperation of the Originator,
deliver to, and deposit with the Trustee, as assignee of the Purchaser, on or
before the Closing Date, the following documents or instruments with respect to
each Mortgage Loan:

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

                  (ii) the original Mortgage, with all riders thereto, noting
         the presence of the MIN of the Mortgage Loan and language indicating
         that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM
         Loan, with evidence of recording thereon, and the original recorded
         power of attorney, if the Mortgage was executed pursuant to a power of
         attorney, with evidence of recording thereon or, if such Mortgage or
         power of attorney has been submitted for recording but has not been
         returned from the applicable public recording office, has been lost or
         is not




                                       3
<PAGE>

         otherwise available, a copy of such Mortgage or power of attorney, as
         the case may be, certified to be a true and complete copy of the
         original submitted for recording;

                  (iii) unless the Mortgage Loan is registered on the MERS(R)
         System, an original Assignment, in form and substance acceptable for
         recording, assigning the related Mortgage either (A) in blank or (B) to
         "Deutsche Bank National Trust Company, as Trustee, without recourse";

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

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

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

                  The Seller hereby confirms to the Purchaser and the Trustee
that it has caused the appropriate entries to be made in its general accounting
records to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.

                  If any of the documents referred to in Section 2.02(ii), (iii)
or (iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian, no
later than the Closing Date, of a copy of each such document certified by the
Originator in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Originator,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. If the
original lender's title insurance policy, or a certified copy thereof, was not
delivered pursuant to Section 2.02(v) above. The Seller shall deliver or cause
to be delivered to the Trustee or the Custodian, the original or a copy of a
written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company, with the original or a certified copy
thereof to be delivered to the Trustee or the Custodian, promptly upon receipt
thereof. The Seller shall deliver or cause to be delivered to the Trustee or the
Custodian promptly upon receipt thereof any other documents constituting a part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption or modification
of any Mortgage Loan.

                  Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File as
provided by Originator to Seller or Custodian, the Originator shall have 90 days
to cure such defect or deliver such missing document to the Purchaser; provided,
however, such requirement shall not relate to delays with respect to documents
delivered for recording and




                                       4
<PAGE>

have not been returned by the recording agency. If the Originator does not cure
such defect or deliver such missing document within such time period, the
Originator shall either repurchase or substitute for such Mortgage Loan pursuant
to Section 2.03 of the Pooling and Servicing Agreement.

                  The Originator shall cause the Assignments which were
delivered in blank to the Seller or the Custodian to be completed and, except
with respect to any Mortgage Loan for which MERS is identified on the Mortgage
or on a properly recorded assignment of the Mortgage as the mortgagee of record,
shall cause all Assignments referred to in Section 2.02(iii) hereof and, to the
extent necessary, in Section 2.02(iv) hereof to be recorded. The Originator
shall be required to deliver such assignments for recording within 180 days of
the Closing Date. In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Originator shall promptly have a
substitute Assignment prepared or have such defect cured, as the case may be,
and thereafter cause each such Assignment to be duly recorded.

                  In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Seller further agrees that it will cause,
within 30 Business Days after the Closing Date, the MERS(R) System to indicate
that such Mortgage Loans have been assigned by the Purchaser to the Trustee in
accordance with the Pooling and Servicing Agreement for the benefit of the
Certificateholders by including in the computer files provided by Seller to MERS
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans.

          The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.

                  The parties hereto intend that the transaction set forth
herein be a sale by the Seller to the Purchaser of all the Seller's right, title
and interest in and to the Mortgage Loans and other property described above. In
the event the transaction set forth herein is deemed not to be a sale, the
Seller hereby grants to the Purchaser a security interest in all of the Seller's
right, title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.

                  In the event that any Mortgage Note is endorsed in blank as of
the Closing Date, promptly following the Closing Date, the Trustee shall cause
(at the Seller's expense) to be completed such endorsements "Pay to the order of
Deutsche Bank National Trust Company, as Trustee, without recourse."

         Section 2.03 Payment of Purchase Price for the Mortgage Loans.

                  In consideration of the sale of the Mortgage Loans from the
Seller to the Purchaser on the Closing Date, the Purchaser agrees to pay to the
Seller on the Closing Date (the "Purchase Price") by transfer of (i) immediately
available funds in an amount equal to the net sale proceeds of the Class A




                                       5
<PAGE>

Certificates, the Mezzanine Certificates and the Class R Certificates and (ii)
the Class C Certificates and the Class P Certificates (together, the "Retained
Certificates"). The Seller shall pay, and be billed directly for, all expenses
incurred by the Purchaser in connection with the issuance of the Certificates,
including, without limitation, printing fees incurred in connection with the
prospectus (the "Base Prospectus") and prospectus supplement (the "Prospectus
Supplement" and, together with the Base Prospectus, the "Prospectus") relating
to the Class A Certificates and the Mezzanine Certificates, blue sky
registration fees and expenses, fees and expenses of Purchaser's counsel, fees
of the rating agencies requested to rate the Class A Certificates and the
Mezzanine Certificates, accountant's fees and expenses and the fees and expenses
of the Trustee and other out-of-pocket costs, if any.


                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

         Section 3.01 Originator Representations and Warranties Relating to the
Mortgage Loans. The Originator hereby makes the representations and warranties
set forth in Exhibit A to the Purchaser with respect to the Mortgage Loans as of
the date the Mortgage Loans were each originated by the Originator (the
"Origination Date") and the date in which the Mortgage Loans were conveyed from
the Originator to the Seller pursuant to the Master Mortgage Loan Purchase And
Interim Servicing Agreement, dated May 1, 2003 (the "Sale Date") or as of such
other date specifically provided in Exhibit A.

         Section 3.02 Originator Representations and Warranties Relating to the
Originator. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein:

                  (a) The Originator is duly organized, validly existing and in
good standing under the laws of the state of its incorporation and is and will
remain in compliance with the laws of each state in which any Mortgaged Property
is located to the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of the Mortgage Loan in accordance with the terms of this
Agreement;

                  (b) The Originator has the full power and authority to
execute, deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Originator 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 the Purchaser and the Seller, constitutes a legal,
valid and binding obligation of the Originator, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization;

                  (c) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any




                                       6
<PAGE>

material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;

                  (d) The Originator is not in violation of, and the execution
and delivery of this Agreement by the Originator and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Originator or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Originator or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;

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

                  (f) Immediately prior to the transfer of the Mortgage Loans by
the Originator to the Seller, the Originator was the owner of record of the
related Mortgage and the indebtedness evidenced by the related Mortgage Note and
in the event that the Originator retains record title, the Originator shall
retain such record title to each Mortgage, each related Mortgage Note and the
related Mortgage Files with respect thereto in trust for the Seller as the owner
thereof and only for the purpose of servicing and supervising the servicing of
each Mortgage Loan;

                  (h) There are no actions or proceedings against, or
investigations of, the Originator before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement, (B) seeking
to prevent the consummation of the transactions contemplated by this Agreement
or (C) that might prohibit or materially and adversely affect the performance by
the Originator of its obligations under, or the validity or enforceability of,
this Agreement;

                  (i) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the Closing Date;

                  (j) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Originator to the Seller were not subject to the bulk transfer or any
similar statutory provisions; and

                  (k) Neither this Agreement nor any written statement, report
or other document prepared and furnished or to be prepared and furnished by the
Originator pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading.





                                       7
<PAGE>

         Section 3.03 Seller Representations and Warranties Relating to the
Seller. The Seller represents, warrants and covenants to the Purchaser as of the
Closing Date or as of such other date specifically provided herein:

                  (a) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;

                  (b) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller 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 the Purchaser, constitutes
a legal, valid and binding obligation of the Seller, enforceable against it in
accordance with its terns except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization;

                  (c) The execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will not
violate the Seller's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;

                  (d) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;

                  (e) [Reserved];

                  (f) Immediately prior to the payment of the Purchase Price for
each Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof,

                  (g) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;





                                       8
<PAGE>

                  (h) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity or enforceability of, this Agreement;

                  (i) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;

                  (j) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller. The sale of the
Mortgage Loans is in the ordinary course of business of the Seller and the
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
are not subject to the bulk transfer or any similar statutory provisions;

                  (k) Except with respect to liens released immediately prior to
the transfer herein contemplated, each Mortgage Note and related Mortgage have
not been assigned or pledged and immediately prior to the transfer and
assignment herein contemplated, the Seller held good, marketable and
indefeasible title to, and was the sole owner and holder of, each Mortgage Loan
subject to no liens, charges, mortgages, claims, participation interests,
equities, pledges or security interests of any nature, encumbrances or rights of
others (collectively, a "Lien"); the Seller has full right and authority under
all governmental and regulatory bodies having jurisdiction over the Seller,
subject to no interest or participation of, or agreement with, any party, to
sell and assign the same pursuant to this Agreement; and immediately upon the
transfers and assignments herein contemplated. the Seller shall have transferred
all of its right, title and interest in and to each Mortgage Loan and the
Trustee will hold good, marketable and indefeasible title to, and be the sole
owner of, each Mortgage Loan subject to no Liens.

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

                  (m) To the best of the Seller's knowledge, nothing has
occurred in the period of time from the date each representation and warranty
was made by the Originator pursuant to the Mortgage Loan Purchase Agreement to
the Closing Date which would cause such representation and warranty to be untrue
in any material respect on the Closing Date.

                  (n) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not




                                       9
<PAGE>

contain any untrue statement of material fact or omit to state a material fact
necessary to make the statements contained therein not misleading.

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

                  (p) None of the mortgage loans are High Cost as defined by the
applicable predatory and abusive lending laws.

         Section 3.04 Remedies for Breach of Representations and Warranties. It
is understood and agreed that the representations and warranties set forth in
Subsections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Originator or as to which the Originator or the
Seller, as applicable, has no knowledge, if it is discovered that the substance
of any such representation and warranty is inaccurate and the inaccuracy
materially and adversely affects the value of the related Mortgage Loan or the
interest therein of the Purchaser or the Purchaser's assignee, designee or
transferee, then notwithstanding the Originator's or the Seller's lack of
knowledge with respect to the substance of such representation and warranty
being inaccurate at the time the representation and warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation and
warranty and the Originator or the Seller, as applicable, shall take such action
described in the following paragraphs of this Section 3.04 in respect of such
Mortgage Loan. Upon discovery by any of the Originator, the Seller or the
Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of a Mortgage Loan or the
interest therein of the Purchaser, the party discovering such breach shall give
prompt written notice to the others. It is understood by the parties hereto that
a breach of the representations and warranties made in Section 3.01(rr), (uu),
(bbb), (ggg) and (hhh) will be deemed to materially and adversely affect the
value of the related Mortgage Loan or the interest of the Purchaser.

                  Within 90 days of the earlier of either discovery by or notice
to the Originator or the Seller, as applicable, of any breach of a
representation or warranty made by the Originator or the Seller, as applicable,
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator or the
Seller, as applicable, shall use its best efforts promptly to cure such breach
in all material respects and, if such breach cannot be cured, the Originator or
the Seller, as applicable, shall, at the Purchaser's option, repurchase such
Mortgage Loan at the Purchase Price. The Originator or the Seller, as
applicable, may, at the request of the Purchaser and assuming the Originator or
the Seller, as applicable, has a Qualified Substitute Mortgage Loan, rather than
repurchase a deficient Mortgage Loan as provided above, remove such Mortgage
Loan and substitute in its place a Qualified Substitute Mortgage Loan or Loans.
If the Originator or the Seller, as applicable, does not provide a Qualified
Substitute Mortgage Loan or Loans, it shall repurchase the deficient Mortgage
Loan. Any repurchase of a Mortgage Loan(s) pursuant to the foregoing provisions
of this Section 3.04 shall occur on a date designated by the Purchaser and shall
be accomplished by deposit in accordance with




                                       10
<PAGE>

Section 2.03 of the Pooling and Servicing Agreement. Any repurchase or
substitution required by this Section shall be made in a manner consistent with
Section 2.03 of the Pooling and Servicing Agreement.

                  Notwithstanding the foregoing, within 90 days of the earlier
of discovery by the Originator or receipt of notice by the Originator of the
breach of the representation of the Originator of representation (zz) of Exhibit
A, which materially and adversely affects the interests of the Holders of the
Class P Certificates in any Prepayment Charge, the Originator shall pay the
amount of the scheduled Prepayment Charge, for the benefit of the Holders of the
Class P Certificates, by remitting such amount to the Servicer for deposit to
the Collection Account, net of any amount previously collected by the Servicer
and paid by the Servicer, for the benefit of the Holders of the Class P
Certificates, in respect of such Prepayment Charge.

                  At the time of substitution or repurchase of any deficient
Mortgage Loan, the Purchaser and the Originator or the Seller, as applicable,
shall arrange for the reassignment of the repurchased or substituted Mortgage
Loan to the Originator or the Seller, as applicable, and the delivery to the
Originator or the Seller, as applicable, of any documents held by the Trustee
relating to the deficient or repurchased Mortgage Loan. In the event the
Purchase Price is deposited in the Collection Account, the Originator or the
Seller, as applicable, shall, simultaneously with such deposit, give written
notice to the Purchaser that such deposit has taken place. Upon such repurchase,
the Mortgage Loan Schedule shall be amended to reflect the withdrawal of the
repurchased Mortgage Loan from this Agreement.

                  As to any Deleted Mortgage Loan for which the Originator or
the Seller, as applicable, substitutes a Qualified Substitute Mortgage Loan or
Loans, the Originator or the Seller, as applicable, shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement. with the Mortgage Note endorsed as required
therein. The Originator or the Seller, as applicable, shall remit for deposit in
the Collection Account the Monthly Payment due on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution will be retained by the Originator or the Seller, as
applicable,. For the month of substitution, distributions to the Purchaser will
include the Monthly Payment due on such Deleted Mortgage Loan in the month of
substitution, and the Originator or the Seller, as applicable, shall thereafter
be entitled to retain all amounts subsequently received by the Originator or the
Seller, as applicable, in respect of such Deleted Mortgage Loan. Upon such
substitution, the Qualified Substitute Mortgage Loans shall be subject to the
terms of this Agreement in all respects, and the Originator or the Seller, as
applicable, shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans as of the date of substitution, the covenants,
representations and warranties set forth in Subsections 3.01 and 3.02.

                  It is understood and agreed that the representations and
warranties set forth in Sections 3.01 and 3.02 shall survive delivery of the
respective Mortgage Files to the Trustee on behalf of the Purchaser.





                                       11
<PAGE>

                  It is understood and agreed that the obligations of the
Originator or the Seller, as applicable, set forth in this Section 3.04 to cure,
repurchase and substitute for a defective Mortgage Loan and the obligations of
the Originator to indemnify the Purchaser as provided in Section 5.01 constitute
the sole remedies of the Purchaser respecting a missing or defective document or
a breach of the representations and warranties contained in Section 3.01 or
3.02.

                                   ARTICLE IV.

                       ORIGINATOR'S AND SELLER'S COVENANTS

         Section 4.01 Covenants of the Originator and the Seller. The Originator
and the Seller hereby covenant that except for the transfer by the Originator to
the Seller under the Master Mortgage Loan Purchase and Interim Servicing
Agreement, dated May 1, 2003, between the Originator and the Seller (and the
Confirmations relating to the Mortgage Loans) and the transfer hereunder,
neither the Originator nor the Seller will sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on
any Mortgage Loan, or any interest therein; the Originator and the Seller will
notify the Trustee, as assignee of the Purchaser, of the existence of any Lien
on any Mortgage Loan immediately upon discovery thereof, and the Originator and
the Seller will defend the right, title and interest of the Trust, as assignee
of the Purchaser, in, to and under the Mortgage Loans, against all claims of
third parties claiming through or under the Originator or the Seller; provided,
however, that nothing in this Section 4.01 shall prevent or be deemed to
prohibit the Originator or the Seller from suffering to exist upon any of the
Mortgage Loans any Liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Originator or the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

         Section 5.01      Indemnification.

                  (a) The Originator indemnifies and holds harmless the Seller,
the Purchaser, Greenwich Capital Markets, Inc. (the "Underwriter"), their
respective officers and directors and each person, if any, who controls the
Seller, the Purchaser and the Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, as follows:

                           (i) against any and all losses, claims, expenses,
damages or liabilities, joint or
several, to which the Seller, the Purchaser, the Underwriter or such officers,
directors or controlling persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof including, but not limited to, any loss, claim, expense, damage
or liability related to purchases and sales of the Certificates) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Prospectus Supplement, or any




                                       12
<PAGE>

amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
to the extent that any untrue statement or alleged untrue statement therein
results from an error or material omission in (A) the information under the
heading "Meritage Mortgage Corporation" in the Prospectus Supplement or (B) any
Derived Information to the extent that such error or material omission in any
Derived Information results from an error or material omission in the Originator
Provided Information, which error, in the case of either (A) above or (B) above,
was not superseded or corrected by the delivery to the Purchaser of corrected
written or electronic information, or for which the Originator provided written
notice of such error to the Purchaser prior to the confirmation of the sale of
the Certificates; and will reimburse the Purchaser and each such controlling
person for any legal or other expenses reasonably incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred;

                           (ii) against any and all loss, liability, claim,
damage and expense whatsoever, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Purchaser; and

                           (iii) against any and all expense whatsoever
(including the fees and disbursements of counsel chosen by the Purchaser),
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under clause (i) or clause (ii) above.

                  This indemnity agreement will be in addition to any liability
which the Originator may otherwise have.

                  (b) The Seller indemnifies and holds harmless the Originator
and its officers and directors and each person, if any, who controls the
Originator within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, as follows:

                           (i) against any and all losses, claims, expenses,
damages or liabilities, joint or several, to which the Originator or such
officers, directors or controlling persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof including, but not limited to, any
loss, claim, expense, damage or liability related to purchases and sales of the
Certificates) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Prospectus Supplement, or
any amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
except to the extent that any untrue statement or alleged untrue statement
therein results from an error or material omission in (A) the information under
the heading "Meritage Mortgage Corporation" in the Prospectus Supplement or




                                       13
<PAGE>

(B) any Derived Information to the extent that such error or material omission
in any Derived Information results from an error or material omission in the
Originator Provided Information, which error, in the case of either (A) above or
(B) above, was not superseded or corrected by the delivery to the Purchaser of
corrected written or electronic information, or for which the Originator
provided written notice of such error to the Purchaser prior to the confirmation
of the sale of the Certificates; and will reimburse the Purchaser and each such
controlling person for any legal or other expenses reasonably incurred by the
Purchaser or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred;

                  (c) For purposes of this Agreement, (i) "Derived Information"
means the information in the Prospectus Supplement that has been derived by the
Purchaser or its Affiliates or by a servicer acting on their behalf from
Originator Provided Information and (ii) "Originator Provided Information" means
any computer tape (or other information) concerning characteristics of the
Mortgage Loans furnished to the Seller, to any of the Seller's Affiliates or to
a servicer acting on their behalf by or on behalf of the Originator.

                  (d) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.

                  If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article V for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.

                  Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel




                                       14
<PAGE>

at the expense of the indemnifying party, the indemnifying party shall not have
the right to assume the defense of such action on behalf of such indemnified
party, it being understood, however, the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to local counsel) at any
time for all such indemnified parties, which firm shall be designated in writing
by the Purchaser, if the indemnified parties under this Article V consist of the
Purchaser.

                  Each indemnified party, as a condition of the indemnity
agreement contained in Section 5.01(a) and (b) hereof, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.

                  (e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for Section 5.01(a) and
(b) above is unavailable or insufficient to hold harmless an indemnified party,
the Originator shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by such indemnified party in such proportion as shall be appropriate to
reflect the relative benefits received by the Originator on the one hand (from
the sale of the Mortgage Loans to the Seller) and the Seller, the Purchaser and
the Underwriter on the other (from the sale of the Mortgage Loans to the
Purchaser in the case of the Seller, from the sale of its interest in the
Mortgage Loans pursuant to the Prospectus in the case of the Purchaser or from
underwriting fees and discounts in the case of the Underwriter); provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11 (f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

                  (f) The Originator and the Seller, severally and not jointly,
agree to indemnify and to hold each of the Purchaser, the Trustee, each of the
officers and directors of each such entity and each person or entity who
controls each such entity or person and each Certificateholder 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
Purchaser, the Trustee, or any such person or entity and any




                                       15
<PAGE>

Certificateholder may sustain in any way (i) related to the failure of the
Originator or the Seller, as the case may be, to perform its duties in
compliance with the terms of this Agreement, (ii) with respect to the
Originator, arising from a breach by the Originator of its representations and
warranties in Sections 3.01 and 3.02 of this Agreement, (iii) with respect to
the Seller, arising from a breach by the Seller of its representations and
warranties in Sections 3.03 of this Agreement or (iv) related to the servicing
of the Mortgage Loans by reason of any acts, omissions, or alleged acts or
omissions of the Originator or the Seller, as the case may be, or any servicer
that serviced any such Mortgage Loan during the period in which the Originator
or the Seller, as the case may be, owned such Mortgage Loan. The Originator and
the Seller shall immediately notify the Purchaser, the Trustee and each
Certificateholder if a claim is made by a third party with respect to this
Agreement. The indemnifying party shall assume the defense of any such claim and
pay all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Purchaser, the Trustee or any such person or entity and/or any
Certificateholder in respect of such claim.

                                   ARTICLE VI.

                                   TERMINATION

         Section 6.01 Termination. The respective obligations and
responsibilities of the Originator, the Seller and the Purchaser created hereby
shall terminate (except for (i) the Originator's and the Seller's indemnity
obligations as provided herein and (ii) the representations and warranties made
by the Originator and the Seller hereunder and the Originator's and the Seller's
obligations to remedy breaches thereof to the extent set forth herein) upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS

         Section 7.01 Amendment. This Agreement may be amended from time to time
by the Originator, the Seller and the Purchaser, by written agreement signed by
the Originator, the Seller and the Purchaser.

         Section 7.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.

         Section 7.03 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows: (i) if to the Originator, Meritage Mortgage Corporation, 600 SW Meadows
Rd., Suite 500, Lake Oswego, Oregon 97035, Attention: Rick Baldwin; with a copy
to RBMG, Inc., 9710 Two Notch Road, Columbia, South Carolina 29223, cc Chief
Legal Counsel, or such other address as may hereafter be furnished by the
Originator, (ii) if to the Seller, Greenwich Capital Financial Products, Inc.,
600 Steamboat Road, Greenwich, Connecticut 06830, Attention: Legal, or such
other address as may




                                       16
<PAGE>

hereafter be furnished by the Seller and (iii) if to the Purchaser, Financial
Asset Securities Corp., 600 Steamboat Road, Greenwich, Connecticut 06830,
Attention: Legal, or such other address as may hereafter be furnished by the
Purchaser.

         Section 7.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.

         Section 7.05 Counterparts. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.

         Section 7.06 Further Agreements. The Originator, the Purchaser and the
Seller each agree to execute and deliver to the other such additional documents,
instruments or agreements as may be necessary or reasonable and appropriate to
effectuate the purposes of this Agreement or in connection with the issuance of
any Series of Certificates representing interests in the Mortgage Loans.

         Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Originator and the Seller will cooperate with the Purchaser in connection with
the sale of any of the securities representing interests in the Mortgage Loans.
In that connection, the Originator and the Seller will provide to the Purchaser
(at the Purchaser's expense) any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Originator or the Seller as are reasonably required in connection with
such transactions and the offering of investment grade securities rated by the
Rating Agencies.

         Section 7.07 Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Mortgage Loans and the
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.

         Section 7.08 Successors and Assigns; Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Originator, the Seller, the Purchaser and the Trustee.





                                       17
<PAGE>

         The obligations of the Originator and the Seller under this Agreement
cannot be assigned or delegated to a third party without the consent of the
Purchaser which consent shall be at the Purchaser's sole discretion, except that
the Purchaser acknowledges and agrees that the Originator and the Seller may
assign its obligations hereunder to any Person into which the Originator or the
Seller is merged or any corporation resulting from any merger, conversion or
consolidation to which the Seller or the Originator is a party or any Person
succeeding to the business of the Seller or the Originator. The parties hereto
acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose
of contributing them to a trust that will issue a series of Certificates
representing undivided interests in such Mortgage Loans. As an inducement to the
Purchaser to purchase the Mortgage Loans, the Seller acknowledges and consents
to the assignment by the Purchaser to the Trustee of all of the Purchaser's
rights against the Seller pursuant to this Agreement insofar as such rights
relate to Mortgage Loans transferred to the Trustee and to the enforcement or
exercise of any right or remedy against the Seller pursuant to this Agreement by
the Trustee. In addition, the Originator acknowledges and consents to the
assignment by the Purchaser to the Trustee of all of the Purchaser's rights
against the Originator pursuant to this Agreement insofar as such rights relate
to Mortgage Loans transferred to the Trustee and to the enforcement or exercise
of any right or remedy against the Originator pursuant to this Agreement by the
Trustee. Such enforcement of a right or remedy by the Trustee shall have the
same force and effect as if the right or remedy had been enforced or exercised
by the Purchaser directly.

         Section 7.09 Survival. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.






                                       18
<PAGE>

                  IN WITNESS WHEREOF, the Originator, the Seller and the
Purchaser have caused their names to be signed to this Mortgage Loan Purchase
Agreement by their respective officers thereunto duly authorized as of the day
and year fist above written.

                                         MERITAGE MORTGAGE CORPORATION,
                                         as Originator


                                         By:________________________________
                                         Name:
                                         Title:



                                         FINANCIAL ASSET SECURITIES CORP.,
                                         as Purchaser


                                         By:________________________________
                                         Name:
                                         Title:



                                         GREENWICH CAPITAL FINANCIAL
                                         PRODUCTS, INC., as Seller


                                         By:_________________________________
                                         Name:
                                         Title:





                                       19
<PAGE>

                                   SCHEDULE I

                                 MORTGAGE LOANS

                             AVAILABLE UPON REQUEST




                                       20
<PAGE>

                                    EXHIBIT A

        Representation and Warranties with Respect to the Mortgage Loans

                  The Originator hereby represents and warrants to the Purchaser
that, as to each Mortgage Loan, as of the Origination Date and the related Sale
Date or as of such other date specifically provided herein:

         (a) As of the Closing Date, the information set forth in the Mortgage
Loan Schedule is complete, true and correct;

         (b) [Reserved];

         (c) Except as provided in the Mortgage Loan Schedule, all payments
required to be made up to the close of business on November 30, 2003 for such
Mortgage Loan under the terms of the Mortgage Note have been made; the
Originator has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by the
Mortgage Note or Mortgage; and there has been no delinquency, exclusive of any
period of grace, in any payment by the Mortgagor thereunder since the
origination of the Mortgage Loan;

         (d) As of the Closing Date, there are no delinquent taxes, ground
rents, water charges, sewer rents, assessments, insurance premiums, leasehold
payments, including assessments payable in future installments or other
outstanding charges affecting the related Mortgaged Property;

         (e) As of the Closing Date, the terms of the Mortgage Note and the
Mortgage have not been impaired, waived, altered or modified in any respect,
except by written instruments, recorded in the applicable public recording
office if necessary to maintain the lien priority of the Mortgage, and which
have been delivered to the Custodian; the substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required by the related policy, and is reflected on the Mortgage Loan Schedule.
No instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the title insurer, to the extent required by
the policy, and which assumption agreement has been delivered to the Custodian
and the terms of which are reflected in the Mortgage Loan Schedule;

         (f) As of the Origination Date and the Sale Date, the Mortgage Note and
the Mortgage did not and as of the Closing Date, the Originator has received no
notice that the Mortgage Note and the Mortgage are subject to any right of
rescission, set off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission, set
off, counterclaim or defense, including the defense of usury and no such right
of rescission, set off, counterclaim or defense has been asserted with respect
thereto. Each Prepayment Charge or




                                       21
<PAGE>

penalty with respect to any Mortgage Loan is permissible, enforceable and
collectible under applicable federal, state and local law;

         (g) All buildings upon the Mortgaged Property are insured by an insurer
acceptable to Fannie Mae or Freddie Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, pursuant to insurance policies conforming to the
requirements of the Pooling and Servicing Agreement. All such insurance policies
contain a standard mortgagee clause naming the Originator, its successors and
assigns as mortgagee and all premiums thereon have been paid. If the Mortgaged
Property is in an area identified on a Flood Hazard Map or Flood Insurance Rate
Map issued by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration is in effect which policy conforms to the requirements
of Fannie Mae or Freddie Mac. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;

         (h) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, all applicable predatory
and abusive lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
origination and servicing of such Mortgage Loan have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Originator shall maintain or
shall cause its agent to maintain in its possession, available for the
inspection of the Purchaser, and shall deliver to the Purchaser, upon two
Business Days' request, evidence of compliance with all such requirements;

         (i) As of the Closing Date, the Mortgage has not been satisfied,
cancelled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such
satisfaction, cancellation, subordination, rescission or release. With respect
to each second lien Mortgage Loan (i) the first lien is in full force and
effect, (ii) there is no default, breach, violation or event of acceleration
existing under such first lien or the related Mortgage Note, (iii) no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration thereunder, and either (A) the first lien contains a provision
which allows or (B) applicable law requires, the mortgagee under the second lien
Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to
cure any default by payment in full or otherwise under the first lien;

         (j) As of the Closing Date, the Mortgage is a valid, existing and
enforceable first or second lien on the Mortgaged Property, including all
improvements on the Mortgaged Property subject only to (a) the lien of current
real property taxes and assessments not yet due and payable, (b) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and which do
not adversely affect the




                                       22
<PAGE>

Value of the Mortgaged Property, (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property and (d) with respect to each
second lien Mortgage Loan, a first lien. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable (A)
first lien and first priority security interest with respect to each Mortgage
Loan that is indicated by the Originator to be a first lien and (B) second lien
and second priority security interest with respect to each Mortgage Loan which
is indicated by the Originator to be a second lien Mortgage Loan, in either
case, on the property described therein and the Originator has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

         (k) The Mortgage Note and the related Mortgage are genuine and each is
the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms;

         (l) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties. The Mortgagor is a natural person;

         (m) The proceeds of the Mortgage Loan have been fully disbursed to or
for the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder and any and all requirements as to
completion of any on site or off site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;

         (n) [Reserved];

         (o) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) in compliance with any
and all applicable "doing business" and licensing requirements of the laws of
the state wherein the Mortgaged Property is located;

         (p) The Mortgage Loan is covered by an American Land Title Association
("ALTA") lender's title insurance policy (which, in the case of an Adjustable
Rate Mortgage Loan has an adjustable rate mortgage endorsement in the form of
ALTA 6.0 or 6.1) acceptable to Fannie Mae or Freddie Mac, issued by a title
insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring (subject to
the exceptions contained in (j) (a), (b) and (c) above and (d) with respect to
each second lien Mortgage Loan) the Originator, its successors and assigns as to
the first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan and, with respect to any Adjustable- Rate Mortgage Loan, against
any loss by reason of the invalidity or




                                       23
<PAGE>

unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the Mortgage Rate and Monthly Payment. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress to
and from the Mortgaged Property, and against encroachments by or upon the
Mortgaged Property or any interest therein. The Originator is the sole insured
of such lender's title insurance policy, and such lender's title insurance
policy is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Originator, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;

         (q) As of the Closing Date, there is no default, breach, violation or
event of acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration, and the Originator has not waived any default, breach, violation
or event of acceleration. With respect to each Mortgage Loan which is indicated
by the Originator to be a second lien Mortgage Loan (as reflected on the
Mortgage Loan Schedule) (i) the first lien is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such first lien Mortgage or the related Mortgage Note, (iii) no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the first lien Mortgage contains a provision which
allows or (B) applicable law requires, the mortgagee under the second lien
Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to
cure any default by payment in full or otherwise under the First Lien mortgage;

         (r) As of the Closing Date, there are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such lien) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;

         (s) All improvements which were considered in determining the Value of
the related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property;

         (t) The Mortgage Loan was originated by the Originator or by a savings
and loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved as such by the Secretary of HUD;

         (u) Principal payments on the Mortgage Loan commenced no more than
sixty days after the proceeds of the Mortgage Loan were disbursed, except in the
case of interest only loans. The Mortgage Loan bears interest at the Mortgage
Rate. With respect to each Mortgage Loan, the Mortgage Note is payable on the
first day of each month in Monthly Payments, which, in the case of a fixed rate
Mortgage Loans, are sufficient to fully amortize the original principal balance
over the original term thereof and to pay interest at the related Mortgage Rate,
and, in the case of an Adjustable- Rate Mortgage Loan or interest only loans,
are changed on each Adjustment Date, and in any case, are sufficient to fully
amortize the




                                       24
<PAGE>

original principal balance over the original term thereof and to pay interest at
the related Mortgage Rate. The Index for each Adjustable-Rate Mortgage Loan is
as provided on the Mortgage Loan Schedule. The Mortgage Note does not permit
negative amortization. No Mortgage Loan is a convertible Mortgage Loan;

         (v) The origination practices and, as of the Closing Date, the
collection practices used by the Originator with respect to each Mortgage Note
and Mortgage have been in all respects legal, proper, prudent and customary in
the mortgage origination and servicing industry. As of the Closing Date, the
Mortgage Loan has been serviced by the Originator or its designee and any
predecessor servicer in accordance with the terms of the Mortgage Note. With
respect to escrow deposits and Escrow Payments (other than with respect to each
Mortgage Loan which is indicated by the Originator to be a second lien Mortgage
Loan and for which the mortgagee under the first lien is collecting Escrow
Payments (as reflected on the Mortgage Loan Schedule)), if any, all such
payments are in the possession of, or under the control of, the Originator or
its designee and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. No escrow
deposits or Escrow Payments or other charges or payments due the Originator have
been capitalized under any Mortgage or the related Mortgage Note and no such
escrow deposits or Escrow Payments are being held by the Originator for any work
on a Mortgaged Property which has not been completed;

         (w) The Mortgaged Property is free of damage and waste and there is no
proceeding pending for the total or partial condemnation thereof;

         (x) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure. The Mortgaged Property is not subject to any bankruptcy
proceeding or foreclosure proceeding and the Mortgagor has not filed for
protection under applicable bankruptcy laws. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. The Mortgagor has not notified the Originator and the Originator has
no knowledge of any relief requested or provided to the Mortgagor under the
Soldiers and Sailors Civil Relief Act of 1940;

         (y) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Originator in effect at the time the Mortgage Loan
was originated; and the Mortgage Note and Mortgage and applicable riders are on
forms acceptable to prudent lenders in the secondary market;

         (z) The Mortgage Note is not and has not been secured by any collateral
except the lien of the corresponding Mortgage on the Mortgaged Property and the
security interest of any applicable security agreement or chattel mortgage
referred to in (x) above;

         (aa) The Mortgage File contains an appraisal of the related Mortgaged
Property which satisfied the standards of Fannie Mae or Freddie Mac and was made
and signed, prior to the funding of the Mortgage Loan application, by a
qualified appraiser, duly appointed by the Originator, who had no interest,




                                       25
<PAGE>

direct or indirect in the Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or disapproval of
the Mortgage Loan and who met the minimum qualifications of Fannie Mae or
Freddie Mae. Each appraisal of the Mortgage Loan was made in accordance with the
relevant provisions of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989;

         (bb) In the event the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor;

         (cc) No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by the Originator, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;

         (dd) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law with
respect to the making of fixed- rate mortgage loans in the case of fixed rate
Mortgage Loans, and adjustable rate mortgage loans in the case of
Adjustable-Rate Mortgage Loans and rescission materials with respect to
Refinanced Mortgage Loans, and such statement is and will remain in the Mortgage
File;

         (ee) No Mortgage Loan was made in connection with (a) the construction
or rehabilitation of a Mortgaged Property or (b) facilitating the trade in or
exchange of a Mortgaged Property;

         (ff) The Originator has no knowledge of any circumstances or condition
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan;

         (gg) The Mortgaged Property is lawfully occupied under applicable law;
all inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy, have been made or obtained from the appropriate authorities;

         (hh) No omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of any
person, including without limitation the Mortgagor, any appraiser, any builder
or developer, or any other party involved in the origination of the Mortgage
Loan or in the application of any insurance in relation to such Mortgage Loan;





                                       26
<PAGE>

         (ii) The Assignment of Mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located;

         (jj) As of the Closing Date, any principal advances made to the
Mortgagor prior to the Cut off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having (A) first lien priority with respect to each Mortgage Loan which is
indicated by the Originator to be a first lien (as reflected on the Mortgage
Loan Schedule), or (B) second lien priority with respect to each Mortgage Loan
which is indicated by the Originator to be a second lien Mortgage Loan (as
reflected on the Mortgage Loan Schedule), in either case by a title insurance
policy, an endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence acceptable to Fannie Mae or Freddie Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;

         (kk) As to any Mortgage Loan which is not a MERS Loan, the Assignment
of Mortgage is in recordable form and is acceptable for recording under the laws
of the jurisdiction in which the Mortgaged Property is located;

         (ll) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets the eligibility requirements of Originator's underwriting guides;

         (mm) The source of the down payment with respect to each Mortgage Loan
has been fully verified by the Originator if required pursuant to the
Originator's underwriting guidelines;

         (nn) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;

         (oo) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards including,
without limitation, asbestos, and neither the Originator nor, to the
Originator's knowledge, the related Mortgagor, has received any notice of any
violation or potential violation of such law;

         (pp) As of the Closing Date, each Mortgage Loan is covered by a fully
assignable, life of loan tax service contract which is assignable to the
Purchaser or its designee;

         (qq) As of the Closing Date, each Mortgage Loan is covered by a flood
zone service contract which is assignable to the Purchaser or its designee or,
for each Mortgage Loan not covered by such flood zone service contract, the
Originator agrees to purchase such flood zone service contract;

         (rr) No Mortgage Loan is (a) subject to the provisions of the
Homeownership and Equity Protection Act of 1994 as amended ("HOEPA"), (b) a
"high cost" mortgage loan, "covered" mortgage loan or "predatory" mortgage loan
under any federal, state or local law, or (c) subject to any comparable




                                       27
<PAGE>

federal, state or local statutes or regulations, including, without limitation,
the provisions of the Georgia Fair Lending Act, the City of Oakland, California
Anti-Predatory Lending Ordinance No. 12361 or any other statute or regulation
providing assignee liability to holders of such mortgage loans;

         (ss) No predatory, abusive or deceptive lending practices, including
but not limited to, the extension of credit to a mortgagor without regard for
the mortgagor's ability to repay the Mortgage Loan and the extension of credit
to a mortgagor which has no apparent benefit to the mortgagor, were employed in
connection with the origination of the Mortgage Loan;

         (tt) The debt-to-income ratio of the related Mortgagor was not greater
than 60% at the origination of the related Mortgage Loan;

         (uu) None of the proceeds of the Mortgage Loan were used to finance the
purchase of single premium credit life or disability insurance policies or any
comparable insurance.

         (vv) No Mortgage Loan had a Loan-to-Value Ratio or combined
Loan-to-Value Ratio in excess of 100% origination of such Mortgage Loan;

         (ww) The Mortgage Loans were not selected from the outstanding fixed
and adjustable- rate one to four-family mortgage loans in the Originator's
portfolio at the related Sale Date as to which the representations and
warranties set forth in this Agreement could be made in a manner so as to affect
adversely the interests of the Purchaser;

         (xx) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder;

         (yy) The Mortgage Loan complies with all applicable consumer credit
statutes and regulations, including, without limitation, the respective Uniform
Consumer Credit Code laws in effect in Colorado, Idaho, Indiana, Iowa, Kansas,
Maine, Oklahoma, South Carolina, Utah and Wyoming, has been originated by a
properly licensed entity, and in all other respects, complies with all of the
material requirements of any such applicable laws;

         (zz) The information set forth in the Prepayment Charge schedule is
complete, true and correct in all material respects and each Prepayment Charge
is permissible, enforceable and collectable under applicable federal or state
law;

         (aaa) The Mortgage Loan was not prepaid in full prior to the Sale Date
and the Originator has not received notification from a Mortgagor that a
prepayment in full shall be made after the Closing Date;

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




                                       28
<PAGE>

loan in the trust that was originated on or after March 7, 2003, which is a
"high cost home loan" as defined under the Georgia Fair Lending Act.

         (ccc) As of the Closing Date, with respect to each MERS Loan, a MIN has
been assigned by MERS and such MIN is accurately provided on the Mortgage Loan
Schedule. The related assignment of Mortgage to MERS has been duly and properly
recorded;

         (ddd) As of the Closing Date, with respect to each MERS Loan, the
Originator has not received any notice of liens or legal actions with respect to
such Mortgage Loan and no such notices have been electronically posted by MERS;

         (eee) With respect to each Mortgage Loan which is a second lien, (i)
the related first lien does not provide for negative amortization, and (ii)
either no consent for the Mortgage Loan is required by the holder of the first
lien or such consent has been obtained and is contained in the Mortgage File;

         (ggg) No Group I Mortgage Loan originated on or after October 1, 2002
will impose a prepayment premium for a term in excess of three years. Any loans
originated prior to such date will not impose prepayment penalties in excess of
five years;

         (hhh) As of the Closing Date, the servicer for each Group I Mortgage
Loan has 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.





                                       29

<PAGE>



                                    EXHIBIT D

                             MORTGAGE LOAN SCHEDULE

                                [FILED BY PAPER]










                                       D-1

<PAGE>



                                    EXHIBIT E

                        REQUEST FOR RELEASE OF DOCUMENTS


To:      Deutsche Bank National Trust Company
         1761 East St. Andrew Place
         Santa Ana, California  92705-4934

                  Re:      Pooling and Servicing Agreement dated as of December
                           1, 2003, among Financial Asset Securities Corp. as
                           Depositor, The Provident Bank, as Servicer, and
                           Deutsche Bank National Trust Company, a national
                           banking association, as Trustee

                  In connection with the administration of the Mortgage Loans
held by you as Trustee pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt of the
Trustee's Mortgage File Or the Mortgage Loan described below, for the reason
indicated.

Mortgage Loan Number:
--------------------

Mortgagor Name, Address & Zip Code:
----------------------------------

Reason for Requesting Documents (check one):
-------------------------------------------

_________1.       Mortgage Paid in Full

_________2.       Foreclosure

_________3.       Substitution

_________4.       Other Liquidation (Repurchases, etc.)

_________5.       Nonliquidation Reason:_____________________

Address to which Trustee should deliver the Trustee's Mortgage File:
________________________________________________________________________________
________________________________________________________________________________




                                       E-1

<PAGE>



                                          By:_________________________________
                                                   (authorized signer)

                                          Issuer:_____________________________

                                          Address:____________________________
                                                  ____________________________

                                          Date:_______________________________


Trustee

Deutsche Bank National Trust Company

         Please acknowledge the execution of the above request by your signature
and date below:

         ____________________________                         __________________
         Signature                                            Date

         Documents returned to Trustee:

         ______________________________                       __________________
         Trustee                                              Date



                                       E-2

<PAGE>



                                   EXHIBIT F-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                            ___________ __, 2003



Financial Asset Securities Corp.            The Provident Bank
600 Steamboat Road                          One East Fourth Street
Greenwich, Connecticut 06830                Cincinnati, Ohio 45202

                  Re:      Pooling and Servicing Agreement dated as of December
                           1, 2003, among Financial Asset Securities Corp. as
                           Depositor, The Provident Bank, as Servicer, and
                           Deutsche Bank National Trust Company, as Trustee
                           ----------------------------------------------------

Ladies and Gentlemen:

                  Attached is the Trustee's preliminary exception report
delivered in accordance with Section 2.02 of the referenced Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.

                  With respect to each Mortgage Loan, (i) all documents required
to be delivered to it pursuant to Section 2.01 of the Pooling and Servicing
Agreement are in its possession, (ii) such documents have been reviewed by it
and have not been mutilated, damaged or torn and appear on their face to relate
to such Mortgage Loan and (iii) based on its examination and only as to the
foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (1) and (3) of the Mortgage Loan Schedule accurately
reflects information set forth in the Mortgage File.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in the Mortgage File pertaining to
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File includes any of the documents specified
in clause (v) of Section 2.01 of the Pooling and Servicing Agreement.

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY


                                         By:_________________________________
                                         Name:
                                         Title:



                                      F-1-1

<PAGE>



                                   EXHIBIT F-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                        ________________
                                                             [Date]



Financial Asset Securities Corp.                  The Provident Bank
600 Steamboat Road                                One East Fourth Street
Greenwich, Connecticut 06830                      Cincinnati, Ohio 45202

                  Re:      Pooling and Servicing Agreement (the "Pooling and
                           Servicing Agreement"), dated as of December 1, 2003
                           among Financial Asset Securities Corp., as Depositor,
                           The Provident Bank, as Servicer and Deutsche Bank
                           National Trust Company, as Trustee with respect to
                           Meritage Mortgage Loan Trust 2003-1, Asset-Backed
                           Certificates, Series 2003-1
                           -----------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage loan
paid in full or listed on Schedule I hereto) it (or its custodian) has received
the applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.

                  The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
This Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.

                                     DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                     Trustee


                                     By:_____________________________________
                                     Name:
                                     Title:



                                       F-2-1

<PAGE>



                                   EXHIBIT F-3

                        FORM OF RECEIPT OF MORTGAGE NOTE


Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

                  Re:      Meritage Mortgage Loan Trust 2003-1,
                           Asset-Backed Certificates Series 2003-1
                           ---------------------------------------

Ladies and Gentlemen:

                  Pursuant to Section 2.01 of the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of December 1, 2003
among Financial Asset Securities Corp., as Depositor, The Provident Bank, as
Servicer and Deutsche Bank National Trust Company, as Trustee, we hereby
acknowledge the receipt of the original Mortgage Notes (a copy of which is
attached hereto as Exhibit 1) with any exceptions thereto listed on Exhibit 2.

                                     DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                     Trustee


                                     By:_____________________________________
                                     Name:
                                     Title:



                                      F-3-1

<PAGE>



                                    EXHIBIT G

                                   [RESERVED]





                                       G-1

<PAGE>



                                    EXHIBIT H

                           FORM OF LOST NOTE AFFIDAVIT

                  Personally appeared before me the undersigned authority to
administer oaths, __________________ who first being duly sworn deposes and
says: Deponent is __________________________ of ____________________________,
successor by merger to _________________________ ("Seller") and who has personal
knowledge of the facts set out in this affidavit.

                  On _________________________________,
_________________________________ did execute and deliver a promissory note in
the principal amount of $____________________.

                  That said note has been misplaced or lost through causes
unknown and is presently lost and unavailable after diligent search has been
made. Seller's records show that an amount of principal and interest on said
note is still presently outstanding, due, and unpaid, and Seller is still owner
and holder in due course of said lost note.

                  Seller executes this Affidavit for the purpose of inducing
Deutsche Bank National Trust Company, as trustee on behalf of Meritage Mortgage
Loan Trust 2003-1, Asset-Backed Certificates Series 2003-1, to accept the
transfer of the above described loan from Seller.

                  Seller agrees to indemnify Deutsche Bank National Trust
Company and Financial Asset Securities Corp. harmless for any losses incurred by
such parties resulting from the above described promissory note has been lost or
misplaced.

                                                     By:_______________________





                                       H-1

<PAGE>



STATE OF                )
                        )   SS:
COUNTY OF               )

         On this ______ day of ______________, 20_, before me, a Notary Public,
in and for said County and State, appeared , who acknowledged the extension of
the foregoing and who, having been duly sworn, states that any representations
therein contained are true.

         Witness my hand and Notarial Seal this _________ day of 20__.

____________________________
____________________________
My commission expires __________________________.



                                       H-2

<PAGE>



                                    EXHIBIT I

                                   [RESERVED]




                                       I-1

<PAGE>



                                    EXHIBIT J

                    FORM OF INVESTMENT LETTER [NON-RULE 144A]

                                                       [DATE]
Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California  92705-4934

                  Re:      Meritage Mortgage Loan Trust 2003-1,
                           Asset-Backed Certificates Series 2003-1
                           ---------------------------------------

Ladies and Gentlemen:

                  In connection with our acquisition of the above-captioned
Certificates, we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.

                                              Very truly yours,

                                              [NAME OF TRANSFEREE]

                                              By:_____________________________
                                                       Authorized Officer



                                       J-1

<PAGE>



                       FORM OF RULE 144A INVESTMENT LETTER

                                                [DATE]
Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California  92705-4934

                  Re:      Meritage Mortgage Loan Trust 2003-1,
                           Asset-Backed Certificates Series 2003-1
                           ---------------------------------------

Ladies and Gentlemen:

                  In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have had
the opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we are not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or a plan that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended, nor
are we acting on behalf of any such plan, (d) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in e Securities Act or require registration pursuant thereto,
nor will act, nor has authorized or will authorize any person to act, in such
manner with respect to the Certificates, (e) we are a "qualified institutional
buyer" as that term is defined in Rule 144A under the Securities Act and have
completed either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. We are aware that the sale to us is being made in reliance
on Rule 144A. We are acquiring the Certificates for our own account or for
resale pursuant to Rule 144A and further, understand that such Certificates may
be resold, pledged or transferred only (i) to a person reasonably believed to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.

                                              Very truly yours,

                                              [NAME OF TRANSFEREE]


                                              By:_______________________________
                                                        Authorized Officer


                                       J-2

<PAGE>



                                                            ANNEX 1 TO EXHIBIT J
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A


          [For Transferees Other Than Registered Investment Companies]

                  The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

                  2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $ 1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.

                  _________________ Corporation, etc. The Buyer is a corporation
                  (other than a bank, savings and loan association or similar
                  institution), Massachusetts or similar business trust,
                  partnership, or charitable organization described in Section
                  501(c)(3) of the Internal Revenue Code of 1986, as amended.

                  _________________ Bank. The Buyer (a) is a national bank or
                  banking institution organized under the laws of any State,
                  territory or the District of Columbia, the business of which
                  is substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, a copy of which is
                  attached hereto.

                  _________________ Savings and loan association or equivalent
                  institution and (b) has an audited net worth of at least
                  $25,000,000 as demonstrated in its latest annual financial
                  statements, a copy of which is attached hereto.

                  _________________ Broker-Dealer. The Buyer is a dealer
                  registered pursuant to Section 15 of the Securities Exchange
                  Act of 1934.

                  _________________ Insurance Company. The Buyer is an insurance
                  company whose primary and predominant business activity is the
                  writing of insurance or the reinsuring of risks underwritten
                  by insurance companies and which is subject to supervision by
                  the insurance commissioner or a similar official or agency of
                  a State, territory or the District of Columbia.

--------

1        Buyer must own and/or invest on a discretionary basis at least
         $100,000,000 in securities unless Buyer is a dealer, and, in that case,
         Buyer must own and/or invest on a discretionary basis at least
         $10,000,000 in securities.


                                       J-3

<PAGE>



                  _________________ State or Local Plan. The Buyer is a plan
                  established and maintained by a State, its political
                  subdivisions, or any agency or instrumentality of the State or
                  its political subdivisions, for the benefit of its employees.

                  _________________ ERISA Plan. The Buyer is an employee benefit
                  plan within the meaning of Title I of the Employee Retirement
                  Income Security Act of 1974.

                  _________________ Investment Advisor. The Buyer is an
                  investment advisor registered under the Investment Advisors
                  Act of 1940.

                  _________________ Small Business Investment Company. Buyer is
                  a small business investment company licensed by the U.S. Small
                  Business Administration under Section 301(c) or (d) of the
                  Small Business Investment Act of 1958.

                  _________________ Business Development Company. Buyer is a
                  business development company as defined in Section 202(a)(22)
                  of the Investment Advisors Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit (v)
loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.

                  5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.

                  6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.




                                       J-4

<PAGE>







                                           _____________________________________
                                                     Print Name of Buyer

                                           By:__________________________________
                                           Name:
                                           Title:

                                           Date:________________________________


                                       J-5

<PAGE>



                                                            ANNEX 2 TO EXHIBIT J
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That are Registered Investment Companies]

                  The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

                  2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyers Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.

                  _________________ The Buyer owned $_________ in securities
                  (other than the excluded securities referred to below) as of
                  the end of the Buyer's most recent fiscal year (such amount
                  being calculated in accordance with Rule 144A).

                  _________________ The Buyer is part of a Family of Investment
                  Companies which owned in the aggregate $___________ in
                  securities (other than the excluded securities referred to
                  below) as of the end of the Buyer's most recent fiscal year
                  (such amount being calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

                  5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.



                                       J-6

<PAGE>



                  6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.


                                    ___________________________________
                                    Print Name of Buyer or Adviser

                                    By:________________________________
                                    Name:
                                    Title:

                                    IF AN ADVISER:

                                    ___________________________________
                                    Print Name of Buyer


                                    Date:______________________________




                                       J-7

<PAGE>



                                    EXHIBIT K

                     AFFIDAVIT OF TRANSFER OF R CERTIFICATES
                           PURSUANT TO SECTION 5.02(d)

                       Meritage Mortgage Loan Trust 2003-1
                    Asset-Backed Certificates, SERIES 2003-1

STATE OF                       )
                               ) ss.:
COUNTY OF                      )

                  The undersigned, being first duly sworn, deposes and says as
follows:

                  1. The undersigned is an officer of , the proposed Transferee
of an Ownership Interest in Class R Certificates (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement, (the "Agreement"), relating to
the above-referenced Certificates, among Financial Asset Securities Corp., as
Depositor, The Provident Bank, as Servicer (the "Servicer") and Deutsche Bank
National Trust Company, as Trustee (the "Trustee"). Capitalized terms used, but
not defined herein shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to make this affidavit
on behalf of the Transferee.

                  2. The Transferee is, as of the date hereof and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate either (i) for its own account or (ii)
as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.

                  3. The Transferee has been advised of, and understands that
(i) a tax will be imposed on Transfers of the Certificate to Persons that are
not Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) to a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.

                  4. The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass- through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person).

                  5. The Transferee has reviewed the provisions of Section
5.02(d) of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Certificate including, without
limitation, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of Section 5.02(d) of the
Agreement and the restrictions noted on the face of the Certificate. The


                                       K-1

<PAGE>



Transferee understands and agrees that any breach of any of the representations
included herein shall render the Transfer to the Transferee contemplated hereby
null and void.

                  6. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit K to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.

                  7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.

                  8. The Transferee's taxpayer identification number is
_____________.

                  9. The Transferee is a U.S. Person as defined in Code Section
7701-(a)(30).

                  10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.

                  11. The Transferee is not an employee benefit plan that is
subject to ERISA or a plan that is subject to Section 4975 of the Code, nor is
it acting on behalf of such a plan.




                                       K-2

<PAGE>



                  IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ___ day of __________, ___.

                                                     [NAME OF TRANSFEREE]

                                                     By:________________________
                                                     Name:
                                                     Title:

[Corporate Seal]

ATTEST:

__________________________
[Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be the of the Transferee, and acknowledged that he executed the same as his free
act and deed and the free act and deed of the Transferee.

         Subscribed and sworn before me this __ day of _______, ___.


                               ________________________________________________
                                                 NOTARY PUBLIC

                               My Commission expires the ____ day of ____, ___.




                                       K-3

<PAGE>



                                    EXHIBIT L

                         FORM OF TRANSFEROR CERTIFICATE

                                                      [DATE]

Financial Asset Securities Corp.
600 Steamboat Road
Greenwich, Connecticut 06830

                  Re:      Meritage Mortgage Loan Trust 2003-1,
                           Asset-Backed Certificates Series 2003-1
                           ---------------------------------------

Ladies and Gentlemen:

                  In connection with our disposition of the above Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act, (c)
to the extent we are disposing of a Class [ ] Certificate, we have no knowledge
the Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.

                                                     Very truly yours,

                                                     TRANSFEROR

                                                     By:________________________
                                                     Name:
                                                     Title:



                                       L-1

<PAGE>



                                    EXHIBIT M

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                _____________, 20__


Financial Asset Securities Corp.           Deutsche Bank National Trust Company
600 Steamboat Road                         1761 East St. Andrew Place
Greenwich, Connecticut 06830               Santa Ana, California  92705-4934

                  Re:      Meritage Mortgage Loan Trust 2003-1,
                           Asset-Backed Certificates Series 2003-1
                           ---------------------------------------

Dear Sirs:

                  _______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance Meritage Mortgage Loan Trust 2003-1, Asset-Backed Certificates
Series 2003-1, Class [C][P][R] (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") dated as
of December 1, 2003 among Financial Asset Securities Corp. as depositor (the
"Depositor"), The Provident Bank as servicer (the "Servicer") and Deutsche Bank
National Trust Company as trustee (the "Trustee"). Capitalized terms used herein
and not otherwise defined shall have the meanings assigned thereto in the
Pooling and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to, and covenants with the Depositor, the Trustee and the Servicer the
following:

                  The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 C.F.R.ss.
2510.3-101.

                                                 Very truly yours,

                                                 [Transferee]

                                                 By:____________________________
                                                 Name:
                                                 Title:


                                       M-1

<PAGE>



                                   EXHIBIT N-1

        FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

                  Re:      Meritage Mortgage Loan Trust, Series 2003-1
                           Asset Backed Certificates, Series 2003-1
                           ----------------------------------------

                  I, [identify the certifying individual], certify that:

                  l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of
Financial Asset Securities Corp. (the "Registrant");

                  2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;

                  3. Based on my knowledge, the distribution information and the
servicing information required to be provided to the Trustee by the Servicer
under the Pooling and Servicing Agreement is included in these reports;

                  4. Based on my knowledge and upon the annual compliance
statement included in the report and required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement, and except as
disclosed in the reports, the Servicer has fulfilled its obligations under the
Pooling and Servicing Agreement; and

                  5. I have disclosed to the Registrant's certified public
accountants all significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement.

                  In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: The
Provident Bank and Deutsche Bank, National Trust Company.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated December
1, 2003 (the "Pooling and Servicing Agreement"), among the Registrant as
Depositor, The Provident Bank as servicer and Deutsche Bank National Trust
Company as trustee.

                                            FINANCIAL ASSET SECURITIES CORP.

                                            By:_________________________________
                                            Name:
                                            Title:
                                            Date:


                                      N-1-1

<PAGE>



                                   EXHIBIT N-2

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE TRUSTEE


                  Re:      Meritage Mortgage Loan Trust 2003-1 (the "Trust")
                           Asset-Backed Certificates, Series 2003-1
                           -------------------------------------------------

                  I, [identify the certifying individual], a [title] of Deutsche
Bank National Trust Company, as Trustee of the Trust, hereby certify to
Financial Asset Securities Corp. (the "Depositor"), and its officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:

                  1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;

                  2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and

                  3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these reports.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated December
1, 2003 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, The Provident Bank as servicer and Deutsche Bank National Trust
Company as trustee.

                                       DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                       Trustee


                                       By:__________________________________
                                       Name:
                                       Title:
                                       Date:





                                      N-2-1

<PAGE>



                                   EXHIBIT N-3

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE SERVICER

                  Re:      Meritage Mortgage Loan Trust, Series 2003-1
                           Asset Backed Certificates, Series 2003-1
                           -------------------------------------------

                  I, [identify the certifying individual], certify to Financial
Asset Securities Corp. (the "Depositor"), the Trustee and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:

                  1. I have reviewed the information provided to the Trustee by
the Servicer pursuant to the Pooling and Servicing Agreement and information
correctly derived by the Trustee from such information and included in the
annual report on Form 10-K for the fiscal year [___] and on all reports on Form
8-K filed in respect of periods included in the year covered by that annual
report, of the Depositor relating to the Trust Fund (the "Servicing
Information");

                  2. Based on my knowledge, the Servicing Information in these
reports, taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
as of the last day of the period covered by that annual report;

                  3. Based on my knowledge, the Servicing Information is
correct;

                  4. I am responsible for reviewing the activities performed by
the Servicer under the Pooling and Servicing Agreement and based upon the review
required under the Pooling and Servicing Agreement, and except as disclosed to
the Depositor and the Trustee, the Servicer has fulfilled its obligations under
the Pooling and Servicing Agreement; and

                  5. I have disclosed to the Servicer's certified public
accountants and the Depositor all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar standard as set forth in the Pooling and Servicing
Agreement.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated December
1, 2003 (the "Pooling and Servicing Agreement"), among the Depositor, The
Provident Bank as servicer and Deutsche Bank National Trust Company as trustee.


                                                     THE PROVIDENT BANK


                                                     By:________________________
                                                     Name:
                                                     Title:
                                                     Date:


                                      N-3-1

<PAGE>



                                    EXHIBIT O

                              OFFICER'S CERTIFICATE
                    REGARDING ANNUAL STATEMENT OF COMPLIANCE

                   ___________________ Trust, Series 200_-___
                    _______________ Pass-Through Certificates

                  I, _____________________, hereby certify that I am a duly
appointed __________________________ of _______________________________ (the
"[Master Servicer]"), and further certify as follows:

                  1. This certification is being made pursuant to the terms of
the Pooling and Servicing Agreement, dated as of ____________, _____ (the
"Agreement"), among ______________________, as depositor, the [Master Servicer],
as [master servicer] and ________________, as trustee.

                  2. I have reviewed the activities of the [Master Servicer]
during the preceding year and the [Master Servicer's] performance under the
Agreement and to the best of my knowledge, based on such review, the [Master
Servicer] has fulfilled all of its obligations under the Agreement throughout
the year.

                  Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreements.


Dated: _________________




                                       O-1

<PAGE>




                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.

                                                     By:  ______________________
                                                     Name:
                                                     Title:

                  I, _________________________, a (an) __________________ of the
[Master Servicer], hereby certify that _________________ is a duly elected,
qualified, and acting _______________________ of the [Master Servicer] and that
the signature appearing above is his/her genuine signature.

                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.


                                                     By:  ______________________
                                                     Name:
                                                     Title:




                                       O-2

<PAGE>


                                   SCHEDULE I

                           PREPAYMENT CHARGE SCHEDULE

                             Available Upon Request